What is Loan-to-Value Ratio (LTV)?
Loan-to-value is the size of your loan compared to the value of the home, shown as a percentage. Lenders use it to gauge risk — the lower the LTV, the more equity you have and the safer the loan looks. A higher down payment produces a lower LTV.
Example: Borrowing $360,000 on a $450,000 home is an 80% LTV, the threshold at which conventional buyers typically avoid private mortgage insurance.