Real Estate Glossary

What is Loan-To-Value-Ratio (LTV)?

The loan-to-value ratio (LTV) is a measure of the loan amount compared to the value of the property that the loan is used to purchase. It's usually expressed as a percentage. For example, if a borrower is applying for a loan to buy a property worth $100,000, and the loan amount is $80,000, then the LTV would be 80%. A low LTV indicates a low level of risk to the lender as the borrower has a high percentage of equity in the property.