Loan-to-value compares the loan amount with the property value used by the lender. Start with our example: a two hundred forty thousand dollar loan and a three hundred thousand dollar value. Divide loan by value: two hundred forty thousand divided by three hundred thousand equals zero point eight. Multiply by one hundred to express it as eighty percent. The blue portion shows the loan relative to that value. Use the value basis specified in the problem. In many purchase-loan settings the lender uses the lower of price or appraisal. Mortgage insurance rules depend on the loan program, not the ratio alone. Quick check: what is the loan-to-value ratio in this example? Eighty percent.