What is LTV (Loan to Value)?
The loan amount as a percentage of the property or asset value.
LTV = loan ÷ asset value. A 90% LTV means a 10% down payment. Lower LTV (bigger deposit) usually means a lower interest rate and less risk for the lender.
Example
A 4,500,000 loan on a 5,000,000 home is 90% LTV.
How LTV is calculated
Loan-to-value is simply the loan amount divided by the property's value, expressed as a percent. Borrow 800,000 against a 1,000,000 home and your LTV is 80%. The remaining 20% is your equity, usually funded by your down payment.
Why LTV matters
Lenders treat a higher LTV as higher risk, so a 90% LTV loan often carries a higher rate — and in many markets requires mortgage insurance — while a 60–70% LTV can unlock the lender's best rates. Most lenders also cap the maximum LTV they will offer. Lowering your LTV with a bigger down payment is one of the most reliable ways to cut both your rate and your total interest.