The Loan-to-value ratio or "LTV" shows how much Equity you have in your home. Equity is the difference between how much your home is worth and how much you owe on it. For instance, if your home is worth $200,000 and you owe $130,000 on your Mortgage, you have $70,000 worth of equity in your home. Lenders' experience is that the higher the loan to value (which means the lower the equity) the greater the risk the Borrower may Default on the loan. Therefore, LTV is important for lenders in accessing a borrower's borrow-worthiness, so to speak.