REAL ESTATE GLOSSARY
LTV
Loan-to-Value Ratio
The loan amount divided by the appraised value or purchase price of collateral.
What does LTV mean?
The loan amount divided by the appraised value or purchase price of collateral. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
LTV in context
A $750,000 loan on a $1 million property has a 75% LTV.
Why it matters in financing
LTV can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related real estate terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.