The loan amount as a percentage of the property value.
LTV measures leverage. An 80% LTV means you borrowed 80% and have 20% equity. Lower LTV means less risk for the lender — which is why rates and PMI rules key off it.
Formula: LTV = Loan Amount ÷ Property Value × 100
Example: A $480,000 loan on a $650,000 property is 74% LTV.
FAQ
What is LTV in simple terms?
LTV measures leverage. An 80% LTV means you borrowed 80% and have 20% equity. Lower LTV means less risk for the lender — which is why rates and PMI rules key off it.
How is it calculated?
LTV = Loan Amount ÷ Property Value × 100. Example: A $480,000 loan on a $650,000 property is 74% LTV.