Loan-To-Value Ratio (LTV) Loan-To-Value Ratio (LTV)
The ratio between the principal amount of the loan balance, at origination or thereafter, to the current value of the underlying real estate collateral. The ratio is commonly expressed to a potential borrower as the percentage of value a lending institution is willing to finance. The ratio is dynamic, and varies by such things as lending institution, property type, geographic location, and property size.