Loan to value (abbreviated as LTV) is usually represented as a percentage, calculated by dividing the total mortgage(s) on a property, against the property value.

For example, if a home buyer purchases a property with 20% down payment, and need 80% of the purchase price as a mortgage, the loan to value is 80% loan to value.

Loan to value doesn’t only apply to purchase transactions. Loan to value is just a representation of the loan amount registered on a property. For instance where a borrower would like to refinance their mortgage to take out equity from their home, the banks will refinance a maximum of 80% loan to value. Loan to values can exceed 80% only with private mortgages.

Example: $100,000 property value with a $65,000 mortgage on it, the loan to value is 65% LTV.