How does the loan-to-value (LTV) ratio affect my mortgage?
The (/glossary/loan-to-value) (LTV) ratio—the amount of the loan divided by the property's value—directly affects the risk assessment by lenders.
Key Points
Your (/glossary/loan-to-value) (LTV) is how much you're borrowing compared to the home's value when you first get your mortgage.
Sometimes, the government might ask lenders to re-evaluate home values more conservatively.
Lenders need to make sure your home's value is accurate and realistic.
Technical Research Verification
Our systems synchronized 4 data points and regulatory frameworks to verify this technical brief.
Related Questions
How does the stress test differ for fixed vs. variable in 2026?
Both are stress-tested at the higher of the benchmark (5.25%) or the contract rate + 2%.
Why are 3-year fixed rates dominating the 2026 market?
Borrowers are hesitant to lock in for 5 years at current levels, but find 1-2 year rates too expensive.
Fixed vs. Variable Comparison Table
Fixed locks a 5-year rate with IRD penalty risk; variable floats with prime and typically caps break fees at 3 months interest.
What is the 'IRD' penalty risk for 5-year fixed borrowers?
The Interest Rate Differential (IRD) can cost tens of thousands if you break a fixed mortgage when market rates have dropped.