LTV = loan amount ÷ home value. If you put 20% down on a $500,000 home, your LTV is 80% (you're borrowing $400,000).

LTV affects rates, PMI requirements, and loan eligibility. Conventional loans cap LTV at 97% (3% down), FHA at 96.5%, and VA/USDA at 100%.

PMI is required on conventional loans with LTV above 80% and can be canceled once LTV drops to 80% or auto-removed at 78%.