Loan-to-value ratio (LTV)

Loan-to-value ratio (LTV) is the loan amount divided by the value of the property securing it. Combined loan-to-value adds other liens, such as a first lien, to the loan being assessed before dividing by the property value. Lenders use LTV to set eligibility limits and pricing.

Example

For an illustration, a $240,000 loan secured by a property valued at $300,000 has an LTV of 80%. If a $40,000 second lien is added, the combined loan amount is $280,000, so the CLTV is 93.3%.

On Decisimo's mortgage underwriting page, the par rate uses LTV bands across a decision table, with one rate per cell and applications outside every priced cell referred to a person.