Loan-to-Value (LTV) Calculator
75.00%
Formula: (Loan / Value) x 100
Formula: LTV = (Loan Amount ÷ Property Value) × 100
🏦 Lender LTV Requirements
Your LTV of 75.00% is within the standard range for most commercial property types.
- 65% or less: Conservative, low risk. Excellent loan terms expected.
- 65-75%: Standard range for most commercial property.
- 75-80%: Higher leverage, usually for top-quality, stable assets like multifamily.
- 80%+: Very high leverage, rare for commercial loans, may require special programs or mezzanine debt.
💡 Pro Tip: Your maximum loan amount is determined by three constraints: LTV, DSCR, and Debt Yield. The lender will calculate the max loan under all three and give you the lowest of the three amounts. Always check all three metrics.
Understanding LTV
Want a deeper dive? Read our Complete Guide to LTV for Commercial Loans.
Loan-to-Value (LTV) is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased. In commercial real estate, it's one of the primary risk factors lenders assess when underwriting a loan. A higher LTV means higher risk for the lender, as the borrower has less equity invested in the property. Most commercial lenders cap LTVs at 65-80% depending on the property type, market, and borrower strength.
Frequently Asked Questions
LTV is a primary risk assessment metric. A lower LTV means the borrower has more equity ('skin in the game'), which reduces the lender's potential loss in case of a default. This is why lower LTVs often receive better loan terms.
It varies by property type and market conditions, but most commercial loans fall between 65% and 75% LTV. Stabilized multifamily properties might get up to 80%, while riskier assets like hotels or land might be capped at 50-65%.
Lenders will always use the *lesser* of the purchase price or the appraised value to calculate LTV. This protects them from overpaying for a property.
LTV and your down payment are two sides of the same coin. An LTV of 75% means you are required to make a 25% down payment (100% - 75% = 25%).