LTV or loan-to-value is the ratio of the mortgage loan amount to the property's appraised value or selling price (the lesser of the two).  In other words the LTV is the relationship between the unpaid principal balance of the mortgage and the appraised value.

Buying a Home:

For example, if you buy a home for $100,000 and want to put $20,000 as a down payment, your mortgage amount would be $80,000,  making the LTV or loan to value 80%.

Already have a Loan:

Divide the Balance on your Mortgage Loan by the Appraised value of your home to calculate your LTV.

Lenders use the LTV ratio, along with credit guidelines, loan amount and term length to determine your interest rate or for refinancing purposes.