What is LTV (Loan-to-Value Ratio) in Canadian mortgages?
Total mortgage debt divided by property value. Determines if CMHC insurance is required and which lenders qualify.
Why LTV matters
LTV decides which products a borrower can use and what they cost. Above 80% the mortgage has to be insured. At 80% or below it can be conventional, which opens more lenders and usually better pricing than a high-ratio mortgage.
How is LTV calculated?
Total Mortgage Amount ÷ Property Value
What is the LTV limit for Canadian mortgages?
Max 95% (insured), 80% (uninsured), 65% (HELOC)
LTV example
Worked example
A $400,000 mortgage on a $500,000 property = 80% LTV.
How brokers use LTV
- For a purchase, use the lower of the purchase price and the appraised value, so a low appraisal raises the LTV.
- For an insured mortgage, LTV is calculated on the base loan and the CMHC premium is added afterward.
- Refinances are generally capped at 80% LTV, and a home equity line of credit at 65%.
- Rental and non-owner-occupied properties often have a lower maximum LTV than an owner-occupied home.
More questions about LTV
What LTV do I need for a mortgage in Canada?
Insured mortgages go up to 95% LTV, which means 5% down on an eligible purchase. Uninsured mortgages are capped at 80% LTV, and refinances at 80%.
How do I calculate LTV?
Divide the mortgage amount by the lower of the purchase price and the appraised value, then multiply by 100.