Loan to
Value.
LTV is the ratio of the loan amount to the appraised value of the property — a key risk metric for mortgage and auto lenders. Lower LTV means a larger down payment and lower lender risk. Most lenders prefer LTV ≤ 80% to skip mortgage insurance.
What is LTV?
Loan-to-Value (LTV) measures how much of a property's appraised value is being financed by the loan. A lower LTV means a larger down payment and lower lender risk; a higher LTV means more financing and usually higher interest rates or required insurance.
Formula
LTV (%) = Loan Amount / Appraised Value × 100 Down Payment = Property Value − Loan Amount Down Payment % = 100% − LTV%
Common LTV bands
≤ 60% Excellent — best rates, premium products 60-80% Good — standard mortgage approval, no PMI 80-90% Higher — usually requires mortgage insurance 90-95% High risk — small down payment, higher rates > 95% Specialist programs only
Worked example
EX: Loan ₹80,00,000 on a ₹1,00,00,000 home LTV = 80,00,000 / 1,00,00,000 × 100 = 80% Down Payment = 1,00,00,000 − 80,00,000 = ₹20,00,000 Status = Good — standard approval, no PMI