MortgagesHomebuying Glossary
Loan-to-Value Ratio
Also known as LTV
Your loan amount compared to the home's value, shown as a percentage.
In plain English
LTV is calculated by dividing your loan amount by the home's appraised value or purchase price. A $360,000 loan on a $400,000 home is a 90% LTV — meaning you put down 10%.
Why it matters
Your LTV directly affects whether you're required to pay PMI, and it's the key number lenders track when you request to have PMI removed later.
Where you'll run into it
Guides and tools on TheBuyingPath that cover loan-to-value ratio in context.
Related terms
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