Mortgages
Deposit needed for a target LTV
How much cash is needed to reach a chosen LTV.
The Formula
deposit = value - (target LTV x value)
How much cash is needed to reach a chosen LTV.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| deposit | Deposit | currency | The cash needed at completion. |
| target LTV | Target ratio | decimal | Usually 0.80 to avoid mortgage insurance. |
| value | Property value | currency | The purchase price or appraisal. |
What Each Symbol Means
depositcurrency
Deposit
The cash needed at completion.
target LTVdecimal
Target ratio
Usually 0.80 to avoid mortgage insurance.
valuecurrency
Property value
The purchase price or appraisal.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate loan to value page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Loan To Value, filed under Finance. Every number the guide produces comes from substituting into this one line.