Definition
The Loan-to-Value (LTV) ratio expresses, as a percentage, the relationship between the loan amount and the appraised property value. LTV = loan balance ÷ property value × 100.
In Canada, the key threshold is 80%. If your LTV exceeds 80% (down payment < 20%), your mortgage must be insured by CMHC, Sagen, or Canada Guaranty — the insurance premium is added to the balance or paid up front. Below 80%, the mortgage is "conventional" and insurance is optional.
Lenders often price their best rates within specific LTV bands: 65%, 75%, 80%. Above 80%, the lender pays the insurance and recoups via a slightly higher rate, while remaining competitive. On refinances, the maximum LTV is capped at 80% since 2016 under OSFI B-20 rules.