Mortgages
Loan to value ratio
The loan divided by the property value, expressed as a percentage.
The Formula
LTV = loan amount / property value
The loan divided by the property value, expressed as a percentage.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| LTV | Loan to value | percent | The ratio as a percentage. |
| L | Loan amount | currency | The size of the mortgage. |
| V | Property value | currency | The lower of the purchase price and the appraisal. |
What Each Symbol Means
LTVpercent
Loan to value
The ratio as a percentage.
Lcurrency
Loan amount
The size of the mortgage.
Vcurrency
Property value
The lower of the purchase price and the appraisal.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate loan to value page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Loan To Value, filed under Finance. Every number the guide produces comes from substituting into this one line.