LTV (Loan-to-Value)
Loan amount divided by the lender's eligible value basis. Investment-property cash-out limits vary by lender, program, property, borrower, seasoning, and appraisal.
Financing
How it's calculated
LTV = Loan Amount ÷ Property Value
Example
A $300,000 loan on a $400,000 property = 75% LTV.
Why LTV (Loan-to-Value) matters
LTV is one lender risk input. Lower leverage generally creates more equity buffer, but rate, approval, eligible value, and maximum LTV remain program- and borrower-specific.
How to check LTV (Loan-to-Value) before you rely on it
Ask the lender which value it will use, because that is what the ratio is measured against. On a purchase it is usually the lower of price and appraisal; on a refinance it is the appraisal, sometimes after a seasoning period. Get the program's maximum loan-to-value for an investment property in writing, then model the loan at that cap rather than at the round number you assumed. A five-point difference changes the cash you need to close.
Related terms
- Down Payment %
- Share of the purchase price you pay in cash. Required investment-property down payment varies by occ…
- DSCR (Debt Service Coverage Ratio)
- Net Operating Income ÷ mortgage payment. Measures whether the property's income comfortably covers d…
- BRRRR
- Buy, Rehab, Rent, Refinance, Repeat. A strategy that seeks to reuse capital through new financing af…
Where LTV (Loan-to-Value) shows up in TrueCap
Financing inputs sit in the analyzer's financing section: the rate can start from FRED's national 30-year benchmark and every term is editable. They drive the monthly payment, DSCR, and cash flow after reserves, so a change here moves the verdict and the Offer Ceiling; the results view names the financing assumptions most likely to change the decision.