The loan-to-value (LTV) is the ratio of the size of the loan to the value of the property securing it. It is a useful measurement of the riskiness of a loan. As such, it is the basis of covered bond ratings, investor analysis and covered bond ratings in every country.
Key learning objectives:
Define LTV and learn how to calculate it
Identify what LTV ratios tell you and identify its uses
Discuss the different ways to measure value
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