The amount borrowed under a mortgage loan divided by the initial purchase price is its

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The loan-to-value ratio is a measure that expresses the amount of the loan as a percentage of the property's purchase price or appraised value. It is commonly used by lenders to determine the risk of financing a property and is important in determining the amount of down payment a borrower needs to make. A higher loan-to-value ratio signifies greater risk for the lender, as the borrower has less equity invested in the property, and may lead to higher interest rates or additional requirements such as private mortgage insurance (PMI).

The Amount Borrowed Under a Mortgage Loan Divided by the Initial