Loan-to-Value (LTV)
The ratio of your mortgage balance to the property's appraised value — the key metric for insurance, pricing, and HELOC limits.
Loan-to-Value (LTV) is the ratio of your mortgage balance to the appraised value of your property, expressed as a percentage. A 20% down payment means an 80% LTV at origination. LTV determines whether insurance is required (above 80% LTV triggers mandatory insurance), influences pricing (lower LTV = less risk = better rates), and caps HELOC limits at 65% for the revolving portion (80% combined with amortizing mortgage in a readvanceable structure). LTV decreases over time as you pay down principal and if property values appreciate.
Related Terms
A mortgage where CMHC, Sagen, or Canada Guaranty carries the default risk — required when the down payment is less than 20% of the purchase price.
A revolving credit line secured against your home's equity, priced as Prime plus a spread — typically 0.50% to 1.00% above Prime.
A mortgage with less than 20% down payment — loan-to-value ratio above 80% — that must carry default insurance.
Related FAQs
- What is the Loan-to-Value (LTV) ratio, and how does it impact my ability to refinance?
- What are Loan-to-Income (LTI) limits and how will they affect institutional mortgage portfolios?
- What are the loan and property value limits for CMHC-insured mortgages?
- What are the Loan-to-Income (LTI) limits, and how do they impact lenders?
- How does a low appraisal affect my loan-to-value (LTV) ratio and down payment?