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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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