Loan to Value Calculator
- First loan
- Other loans
- Your equity
You can borrow up to $50,000.00 more before reaching 80% of the value.
How the loan to value calculation works
The share of a property's value you borrow against, with combined LTV for second loans and the most a lender's limit allows.
LTV = loan amount ÷ property value × 100
A $650,000 loan on a $1,000,000 property is 65% LTV.
Combined LTV adds every loan on the property
$650,000 + $100,000 second loan = $750,000, so CLTV is 75%.
Use the lower of price and appraisal
When you buy, lenders usually measure LTV against the lower of the purchase price and the appraised value.
Compare with the lender's limit
At an 80% limit you can borrow up to $800,000 in total, so $50,000 of room is left.
Worked example. A $1,000,000 commercial property with a $650,000 first loan has a 65% LTV. Adding a $100,000 second loan makes the combined LTV 75%, leaving $250,000 (25%) of equity. At an example 80% limit, the most you can borrow is $800,000, so there is $50,000 of room left.
Loan to Value FAQ
How do you calculate loan to value?
Divide the loan amount by the property's value and multiply by 100. $650,000 ÷ $1,000,000 = 65% LTV. When buying, use the lower of the price and the appraisal.
What is the loan to value ratio formula?
LTV = loan amount ÷ appraised value. Combined LTV = (first loan + all other loans secured on the property) ÷ appraised value.
What is the difference between LTV and CLTV?
LTV counts only the first loan. Combined LTV (CLTV) adds second mortgages, home equity lines, seller notes and any other loan secured on the same property.
What is the maximum LTV for a commercial property loan?
It depends on the lender, the loan program and the property, so ask your lender. The calculator does not assume a market limit.
How much down payment does an SBA 504 loan need?
Under 13 CFR 120.910 the borrower contributes at least 10% of the project cost, 15% if the business has operated two years or less or the building is special-purpose, and 20% if both apply. That means the bank and CDC loans together cover up to 90%, 85% or 80% of project cost. The CDC loan covers up to 40% and the bank loan, with a first lien, the rest (13 CFR 120.801).
Why does LTV matter?
A lower LTV means more of your own money is at risk, so lenders see less risk. It can mean a better rate, and it leaves room to borrow more later.
Is LTV the same as debt to equity?
No. LTV compares loans with the value of one property. Debt to equity compares all of a company's debt with the owners' equity on the balance sheet.
Sources: eCFR: 13 CFR 120.910 Borrower contributions (SBA 504) · eCFR: 13 CFR 120.801 How a 504 Project is financed