Terminology Tip![teeter tauter with percentage sign and house teeter tauter with percentage sign and house](https://s.realtyninja.com/static/media/med/6526_fe448a53_loan-to-value-home.jpg)
![teeter tauter with percentage sign and house teeter tauter with percentage sign and house](https://s.realtyninja.com/static/media/med/6526_fe448a53_loan-to-value-home.jpg)
Loan-to-value (LTV) is a term used by lenders to illustrate how much the homeowner owes on their mortgage compared to the value of the home. For example, if someone purchases a property for $100,000, and has a $20,000 down payment, their mortgage would be $80,000, or 80% of the value of the home - an LTV ratio of 80%. The loans LTV is important for establishing your loan eligibility and mortgage rate for both initial loans and refinance transactions.