Definition
The loan amount divided by the property's appraised value or purchase price, whichever is lower.
Example
A $320,000 loan on a $400,000 property is an 80% LTV, the threshold for avoiding PMI.
Related terms
- Acceleration Clause
- Accrued Interest
- Adjustable Rate Cap
- Adjustable-Rate Mortgage
- Amortization
- Annual Percentage Rate
Frequently asked questions
What does Loan-to-Value Ratio mean in real estate?
The loan amount divided by the property's appraised value or purchase price, whichever is lower.
How is Loan-to-Value Ratio used in practice?
A $320,000 loan on a $400,000 property is an 80% LTV, the threshold for avoiding PMI.
This definition is provided for educational purposes. Legal and tax terminology can carry jurisdiction-specific meaning — confirm with a licensed professional before relying on it in a transaction.