ERM Glossary: Loan-to-value ratio (LTV)
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The loan-to-value ratio (LTV) is the
amount of a mortgage balance outstanding as a percentage of the total appraised
value of the property. A high LTV indicates that there is less value to protect
the lender against house price falls or increases in the loan if repayments are
not made and interest is added to the outstanding balance of the loan.
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