LTV

Loan-to-Value Ratio. The loan-to-value ratio is most frequently used in discussing mortgage loans, with higher LTV loans being viewed as “higher risk” loans. Under the capital standards, risk weights for residential mortgage loans are based on the LTV of the loan. Loans are categorized for Basel purposes as Category 1 (less risky, lower risk weight) and Category 2 (higher risk, higher risk weight) loans.