The loan-to-value ratio, or LTV ratio, is calculated by dividing the amount borrowed by the appraised value of the property, and is expressed as a percentage. The loan-to-value (LTV) ratio shows how much you’re borrowing from a lender as a percentage of your home’s appraised value.

The higher your LTV, the riskier you’ll appear during the loan underwriting process because a low down payment denotes less equity or ownership in your property making you more likely to default on your loan.