What Loan-to-Value (LTV) Ratio is Right for Me?
The (/glossary/loan-to-value) (LTV) ratio is a key metric lenders use to gauge risk.
Key Points
If your down payment is less than 20% of the home price, you'll need mortgage insurance.
With a down payment of 20% or more, you usually don't need mortgage insurance.
For riskier mortgages, you might need more equity in your home (lower (/glossary/loan-to-value)) to qualify.
Your down payment size (and resulting (/glossary/loan-to-value)) affects your interest rate, mortgage insurance needs, and overall approval.
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.
What is the Loan-to-Value (LTV) ratio, and how does it impact my ability to refinance?
The Loan-to-Value (LTV) ratio plays a critical role in the refinancing process.
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.