Loan-to-Value (LTV) ratio is the loan amount divided by the property's appraised value, expressed as a percentage. A $300,000 loan on a $400,000 home is 75% LTV. Lenders use LTV to assess risk: lower LTV means more borrower equity at stake, less default risk. Below 80% LTV: no PMI required, best mortgage rates. 80-95% LTV: PMI required, slightly higher rates. Above 95%: limited to specific loan programs. LTV decreases as you pay down principal and as the home appreciates — both drive PMI removal eligibility and unlock refinancing.
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LTV Ratio
August 22, 2026 · Aditya Gupta
Personal Finance
Related terms
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ACH (Automated Clearing House) transfers move money electronically between US bank accounts via the ACH network — direct…
Adjustable-Rate Mortgage
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