LTV (Loan-to-Value Ratio)

Definition

A financial term used to express the ratio of a loan to the value of an asset purchased.

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Home Affordability

Formula: LTV = Loan Amount / Appraised Property Value.

If you buy a $100,000 home with a $10,000 down payment, your loan is $90,000. LTV = $90,000 / $100,000 = 90%.

Generic Limit: Lenders typically prefer an LTV of 80% or lower (meaning a 20% down payment).

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This tool is for illustrative purposes only and does not constitute professional financial, tax, or legal advice. Calculations are estimates and may not reflect real-world variables or local regulations. Always consult with a qualified professional before making financial decisions.