The loan to value ratio is the amount of the mortgage compared with the value of the property.

It is shown as a percentage.

If you get an $80,000 mortgage to buy a $100,000 home, the the loan-to-value is 80% because you got a loan for 80% of the homes’ value. If you are a lender, a mortgage with a high loan-to-value ratio is more risky. Most mortgages with loan to value ratios above 80% require mortgage insurance, which we call PMI (Private Mortgage Insurance).  This would be a higher risk and the lenders need to feel confident in who they choose to loan money to. There is so much more to the lending business, of which I am not an expert, but have worked with many over the last 25 years. There are some loan to value curators that you can find online that will give you a visual to help this all make sense when you crunch the numbers for your purchase and try to plan your costs for your mountain property. Knowledge is power I always say. You can find these online as many lenders want your business of course. Free to look at least, right?

Here is one example of a loan-to-value calculator:

https://www.bankrate.com/calculators/mortgages/ltv-loan-to-value-ratio-calculator.aspx