Loan-to-Value Ratio (LTV)

A term used to express the ratio of your mortgage loan compared to the value of the property. For example, if you borrow $300,000 to purchase a $350,000 home, your LTV ratio is $300,000 / $350,000 or 86%. To make up the full 100%, you would have to make a 14% (100% – 86%) down payment, which in this case would be $50,000. The higher your LTV ratio is, the riskier your loan is for the lender.