What is the Loan-to-Value (LTV) ratio, and how does it impact my ability to refinance?
The (/glossary/loan-to-value) (LTV) ratio plays a critical role in the refinancing process.
Key Points
Your (/glossary/loan-to-value) (LTV) shows how much of your home's value you're borrowing, and it affects your interest rate.
Lenders set limits on how high your LTV can be for different mortgages, and they keep a close eye on these limits.
Lenders will look at things that might affect your home's value when figuring out your LTV for a refinance.
Your LTV is recalculated whenever you refinance your mortgage.
Technical Research Verification
Our systems synchronized 3 data points and regulatory frameworks to verify this technical brief.
Related Questions
How do GDS and TDS ratios affect my refinancing options?
GDS (Gross Debt Service) and TDS (Total Debt Service) ratios are critical affordability indicators that financial institutions use to determine your eligibility for refinancing.
How does OSFI's Guideline B-20 affect refinancing?
OSFI's Guideline B-20 establishes the benchmark for residential mortgage underwriting practices that federally regulated financial institutions (FRFIs) must adhere to.
What is a 'straight switch,' and how does it impact refinancing at renewal?
A "straight switch" refers to the process of transferring an existing uninsured mortgage to a new institution when it's up for renewal, without increasing the remaining amortization period or the loan amount.
What Loan-to-Value (LTV) Ratio is Right for Me?
The Loan-to-Value (LTV) ratio is a key metric lenders use to gauge risk.