CalculateRealEstateROI

Financing

Loan-to-Value (LTV)

Loan amount divided by appraised property value.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Plain-English explanation

How much the bank lends versus what the property is worth. Higher LTV = higher risk and rate.

Formula

LTV = Loan Amount / Appraised Value

Examples

  • $160k loan on $200k property = 80% LTV.
  • Conventional max: 75-80%; DSCR: 75-80%; hard money: 65-75%.

Common mistakes

  • Confusing LTV with LTC.
  • Assuming appraisal equals purchase price.

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