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Loan to Value (LTV)
Loan to Value, usually shortened to LTV, compares the amount borrowed with the value of the asset or collateral supporting the loan. For example, borrowing $60 against collateral worth $100 represents an LTV of 60%.
Why it matters to you
LTV tells you how much borrowing exists relative to the value supporting it. A higher LTV generally leaves less protection against a decline in collateral value before the loan becomes more exposed.
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