# Question: How are Loan-to-Value (LTV) ratios managed in shared equity scenarios?

> LTV ratios are critical in gauging mortgage loan risk; lower LTVs typically signify reduced risk.

Category: Purchasing
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/purchasing/question-how-are-loan-to-value-ltv-ratios-managed-in-shared-equity-scenarios

## Answer
LTV ratios are critical in gauging mortgage loan risk; lower LTVs typically signify reduced risk. For shared equity mortgages, FRFIs enforce strict LTV frameworks, continuously monitoring and updating them to reflect both market conditions and evolving borrower risk profiles. Here's a quick view:

## Institutional highlights
- Your lender needs to keep an eye on how much you owe versus your home's value, adjusting as the market changes.
- There are limits to how much you can borrow based on your down payment and the type of mortgage you get.
- Your lender will re-evaluate your loan-to-value ratio if you refinance or if your financial situation changes.
- Lenders can't find ways around the rules about how much you can borrow relative to your home's value.
- If you have multiple mortgages on your home, the lender looks at all of them when figuring out your loan-to-value ratio for each mortgage.

## Related guide
- https://ratellow.com/guides/shared-equity-fractional

## Sources
- Footnotes — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/capital-adequacy-requirements-car-guideline-2026
- LTV Ratio Frameworks — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#2.4.3
- Disclosure requirements — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#3.1