What is Loan to Value (LTV)?

Loan to Value

Loan to value is a calculation that expresses your total loan amount as a percentage of your property’s market value. Market value is determined by an appraisal.

For example, if your property appraises for $1,000,000 and your total loan amount is $800,000 then your loan to value (LTV) is 80%.

Lenders use this calculation to set limits on how much money they will lend against a property. These limits change based on a number of risk-based factors including credit score, loan size and loan purpose.