Definition
The ratio of a mortgage amount to a property's appraised value, expressed as a percentage. An LTV of 80% means the bank is lending 80% and you're supposedly putting down 20%—in theory.
Example Usage
The bank approved the mortgage at an LTV of 85%, resulting in higher interest rates due to increased risk.
Origin
Metric developed in modern mortgage lending to quantify lender risk exposure
Fun Fact
LTV is why appraisals matter so much—if the property appraises low, your LTV jumps and suddenly you need PMI you didn't budget for.
Source: Mortgage Lending Standards and Risk Management
Related Terms
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See “LTV (Loan-to-Value)” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.
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