High Loan-to-Value Mortgage

(redirected from High Ratio Mortgage)

High Loan-to-Value Mortgage

A mortgage in which the ratio of the amount of the loan is relatively high compared to the value of the property securing it. For example, if the value of a house is $100,000 and the value of the mortgage is $98,000, the loan-to-value ratio is 98%, which is considered high. A high loan-to-value mortgage indicates high risk to the lender because, if it forecloses, it may not be able to sell the house for enough money to compensate itself for the principal plus interest of the original mortgage.
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References in periodicals archive ?
Mr Carney told MPs: "The reason we took out insurance as opposed to trying to reverse activity is because we are in a low interest environment for where a high ratio mortgage could be appropriate."