Financing

What Is Loan-to-Value (LTV)?

Loan-to-value, or LTV, expresses the loan amount as a percentage of the property's value or price.

LTV = Loan amount ÷ Property value × 100

A $2,600,000 loan on a $3,500,000 property is about 74% LTV. Lenders cap LTV to limit their risk, commonly around 70% to 75% on commercial property, though SBA programs for owner-operated assets can go higher. The actual loan is usually the lesser of the LTV cap and what the DSCR supports.

Model the loan and its payment on the commercial mortgage calculator.

See it on a real deal

RVP Underwriter computes this from your documents automatically, with every figure shown and sourced. Underwrite a deal free.

Related terms

Part of the RVP Underwriter glossary of income-property underwriting terms. Browse all definitions, or put them to work with the free calculators.