Loan-to-value ratio (LTV) is the amount of the mortgage loan compared to the value of the property.

This ratio is calculated by the lender prior to providing a mortgage. The results of this calculation help to determine whether or not the applicant will qualify for a loan and whether the application, if approved, will be for a conventional loan or a high ratio loan.

Here is an example.  Assume:

Property Value = $100,000
Down Payment = $10,000

In this case the LTV = 90%

The calculation used is simple:  1 – (down payment / property value)

Or in our example:  1 – ($10,000 / $100,000)

(Source:  CAAMP)