Definition
The ratio of the mortgage amount to the appraised property value, expressed as a percentage. An LTV of 80% means you are borrowing 80% of the home's value (20% down payment). Higher LTV ratios (above 80%) typically require private mortgage insurance. LTV is a key factor in loan approval, interest rates, and PMI requirements.
Related Mortgage Terms
- Appraisal
A professional assessment of a property's market value conducted by a licensed a...
- Down Payment
The upfront portion of the home's purchase price paid in cash by the buyer. Conv...
- Private Mortgage Insurance (PMI)
Insurance required by conventional lenders when the down payment is less than 20...
- Amortization
The process of paying off a mortgage through regular monthly payments of princip...
- Annual Percentage Rate (APR)
The total annual cost of a mortgage expressed as a percentage, including the int...
Understanding mortgage terminology helps you compare loan offers and make informed decisions. Use our mortgage calculator to see how these terms affect your monthly payment.