The ratio of the mortgage amount to the property’s appraised value, expressed as a percentage. A $380,000 loan on a $400,000 home is 95% LTV. Higher LTV means more risk for the lender, which typically means higher rates and mandatory PMI. FHA allows up to 96.5% LTV. VA allows 100% LTV.
Definition reviewed by Renzo Johnson, Licensed MLO, NMLS #PENDING. Last updated February 2026.