LTV
Loan-to-value
Loan-to-value is the loan balance divided by the property's appraised value. It sets how much a lender will advance and, on a cash-out refinance, how much capital you can recycle. Conventional investment-property refinances typically cap at 75% for a single unit and lower for two to four units.
LTV = loan amount ÷ appraised value
Worked example
A $213,750 loan against a $285,000 appraisal is 75% LTV.
Every example in this glossary uses the same deal: a $265,000 duplex renting for $2,650 a month, bought with 25% down at 6.75% over 30 years, producing $19,310 of net operating income.
The mistake to avoid
Where this is calculated
The brrrr calculator computes this from your own numbers and shows the arithmetic expanded. Buy, rehab, rent, refinance, repeat — cash left in the deal, capital recycled, and infinite returns handled properly.
Related terms
- Debt service coverage ratioDSCR is net operating income divided by annual debt service.
- Debt serviceDebt service is the total of principal and interest paid on the loan over a year.
- Seller financingSeller financing is when the seller acts as the bank: you pay a down payment and sign a promissory note secured by the property, then pay the seller monthly.
Back to the full glossary — 20 terms with formulas and worked examples.