LTV (loan-to-value) is a financial ratio that measures the proportion between the loan amount and the value of the collateralized asset, typically real estate. LTV is often used in mortgages or other types of loans to assess the risk and stability of the loan. It is calculated as the ratio of the loan amount to the property value, expressed as a percentage. For example, if the loan amount is €80,000 and the property value is €100,000, the LTV is 80 percent. A lower LTV means less risk for the lender, as the debt represents a smaller proportion of the property's value. Conversely, a higher LTV may indicate greater risk and often leads to higher interest rates or stricter terms.