# How does the loan-to-value (LTV) ratio affect my mortgage?

> The loan-to-value (LTV) ratio—the amount of the loan divided by the property's value—directly affects the risk assessment by lenders.

Category: Strategy
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/strategy/how-does-the-loan-to-value-ltv-ratio-affect-my-mortgage

## Answer
Here's how LTV impacts your mortgage:

| LTV Range  | Risk Level | Interest Rate | Insurance Required |
|------------|------------|---------------|--------------------|
| Lower LTV  | Lower      | Typically Lower| Less likely        |
| Higher LTV | Higher     | Typically Higher| More likely        |

## Institutional highlights
- Your 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.
- If you have a Home Equity Line of Credit (HELOC), only 75% of the credit you haven't used counts towards your LTV.
- The amount of your down payment (which affects your LTV) can impact the interest rate your lender offers.

## Related guide
- https://ratellow.com/guides/fixed-vs-variable-historical

## Sources
- Weekly series — https://www.bankofcanada.ca/rates/banking-and-financial-statistics/posted-interest-rates-offered-by-chartered-banks/#table
- Notes — https://www.bankofcanada.ca/rates/banking-and-financial-statistics/posted-interest-rates-offered-by-chartered-banks/#notes
- Footnotes — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/osfi-exempts-uninsured-mortgage-straight-switches-prescribed-mqr-implements-portfolio-lti-limits
- Contents — https://www.sagen.ca/ups/underwriting-documentation/#documentation