What Does Loan-To-Value (LTV) Mean?

 

The loan-to-value (LTV) ratio is the ratio of the mortgage loan in relation to the current market value of the property being mortgaged.

The LTV ratio is calculated as the mortgage size divided by the current market value of the property, expressed as a percentage.

Let’s take a look at a simple calculation.

Mortgage Size (Loan) : $425,000

Current Market Value : $500,000

This property would have a loan-to-value (LTV) ratio of 85% ($425,000 / $500,000)

The LTV Ratio is used to determine if the mortgage is high-ratio (less than 20% down) or conventional.

If you have any questions, contact Brent or book a call-back time here.

North Van Mortgage Broker