# 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.

Category: Refinance
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/refinance/what-loan-to-value-ltv-ratio-is-right-for-me

## Answer
The Loan-to-Value (LTV) ratio is a key metric lenders use to gauge risk. It's the loan amount shown as a percentage of your property's appraised value. This ratio significantly influences mortgage terms. Understanding the LTV tiers can help you secure the right product and potentially avoid unnecessary expenses like mortgage insurance. Here's a quick breakdown:

## Institutional highlights
- 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 loan-to-value) to qualify.
- Your down payment size (and resulting loan-to-value) affects your interest rate, mortgage insurance needs, and overall approval.

## Related guide
- https://ratellow.com/guides/heloc-vs-second-mortgage

## Sources
- LTV Ratio and Loan Type — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017
- Mortgage insurance — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#2.5.1
- 4.1.11 Exposures secured by residential real estate — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/capital-adequacy-requirements-car-guideline-2026