Loan-to-value ratio,LTV,LTVR

The loan-to-value (LTV) ratio is a financial term used by commercial lenders to express the ratio of a loan underwritten to a value of an asset purchased. The term is commonly used by banks and building societies to represent the ratio of the first mortgage lien as a percentage of the total appraised value of real property. For instance, if a borrower borrows $130,000 to purchase a house worth $150,000 at a relative valuation, the LTV ratio is $130,000/$150,000 or 87%.