How to Calculate Loan-to-Value
To calculate loan-to-value, divide loan amount by property value and convert the result to a percentage. The calculation is simple, but the value basis matters because lenders may use appraised value, purchase price, or a different underwriting value.
Estimates are based on your inputs and assumptions. DealSharp does not provide financial, investment, legal, tax, or lending advice.
Run the number, then pressure-test the assumptions.
To calculate loan-to-value, divide loan amount by property value and convert the result to a percentage. The calculation is simple, but the value basis matters because lenders may use appraised value, purchase price, or a different underwriting value.
Use this page to understand the metric directionally, then compare it against financing, reserves, repair risk, cash flow, and your own constraints.
Loan-to-value = loan amount / property value
A $225,000 loan on a $300,000 value gives 75% LTV.
Use the formula inside a full deal model
DealSharp helps compare assumptions, debt service, cash flow, and risk flags so this metric is not reviewed in isolation.
Open DealSharpHow to read this number
The useful move is not treating one number as a final answer. Use it to decide which assumptions deserve more review, then compare the result against cash flow, financing, reserves, repair risk, and your own constraints.
Inputs required
- Loan amount.
- Property value basis.
- Context for whether this is purchase or refinance analysis.
Outputs explained
- LTV percentage.
- Leverage level for the modeled scenario.
- Related down payment and refinance context.
Assumptions to review
- Value input is accepted for the calculation.
- Loan amount reflects the financing scenario.
- The result is an estimate and does not confirm loan terms.
What this tells you
- LTV helps describe leverage.
- It can show how much equity is in the model.
- It supports comparison with DSCR and debt yield.
What this does not tell you
- LTV does not show cash flow or income coverage.
- It can change if appraisal or value assumptions change.
Common mistakes
- Mixing purchase price and ARV without labeling the value basis.
- Ignoring closing costs.
- Assuming LTV alone decides financing.
FAQ
How do I convert LTV to a percentage?
Divide loan amount by property value, then multiply by 100.
What else should I check with LTV?
Review DSCR, debt yield, cash flow, reserves, and lender requirements.
Run the full deal before deciding
This page helps with one metric or workflow. DealSharp is built for full real estate deal analysis: assumptions, financing, cash flow, repair scenarios, DSCR, cap rate, and risk flags based on your inputs.
Open DealSharpDisclaimer
DealSharp provides calculation and scenario-modeling tools for informational purposes only. Outputs are estimates based on your inputs and assumptions. DealSharp does not provide financial, investment, legal, lending, tax, or accounting advice. Verify important decisions with qualified professionals.