LTV (Loan-to-Value)
Loan amount divided by home value, expressed as a percentage.
An $80,000 mortgage on a $100,000 home has 80% LTV. Below 80%, you typically don't need PMI. Lenders use LTV as a key risk indicator — lower LTV = lower rate.
Related
- PMI (Private Mortgage Insurance) — Insurance that protects the lender if you default — required when you put less than 20% down.
- Down payment — The cash you pay up front toward a home purchase.