Loan-to-Value Ratio

The ratio of a mortgage loan amount to the appraised property value. A higher LTV means more risk for the lender, often requiring private mortgage insurance above 80%.

Lenders treat LTV as a core measure of risk: the less equity a borrower has, the more the lender stands to lose in a default. Conventional loans above 80% LTV usually require private mortgage insurance, and most refinances and HELOCs cap combined LTV around 80–90%.