Term Tuesday: LTV

Image via Renjith Krishnan

The loan-to-value ratio, or LTV, represents the amount of the mortgage against the value of the property. For example, if a home is worth $200,000 and the outstanding balance of the loan is $150,000, the home has a 75% LTV.

LTV is an important gauge when securing a mortgage. For example, it is generally more difficult to qualify for a loan on a property with a high LTV (80% or more), and it will be subject to Private Mortgage Insurance. *Note: VA Loans are an exception to this rule.


If the property has more than one lien against it, they are added together to asses the Combined Loan to Value, or CLTV.