How leveraged is this property?

What loan-to-value measures

LTV is leverage stated as a percentage: the loan balance against what the property is worth. At 72%, the bank has financed 72 cents of every dollar of value and your equity is the other 28. The ratio is how a lender sizes its cushion — if values fall and the property must be sold, LTV is the distance between the sale proceeds and a loss on the loan — and it is your equity read in a mirror, which is why the same two inputs answer both questions at once. On a rental portfolio, per-property LTV is also the map of where the borrowing capacity sits.

How the number is computed

LTV = loan balance ÷ property value × 100, with today's numbers on both sides: the payoff balance rather than the original loan, and the current market value rather than the purchase price. Combined LTV asks the fuller question — every lien on the property, a second mortgage or a drawn HELOC included, against the same value — because in a sale every lender is paid before you are. The equity figures are the same arithmetic from your side of the table: value minus total debt, in dollars and as a share. A property can carry a comfortable first-mortgage LTV and still be fully levered once the second is counted, which is exactly the case the combined figure exists to catch.

The thresholds that matter

Conventional owner-occupied lending runs to 80% (beyond it, mortgage insurance); investment property typically caps at 75–80% on a purchase and a step lower on a cash-out refinance; commercial lenders commonly hold to 65–75%. Those lines decide more than approval — pricing tiers step at 60, 70 and 80%, so a point of LTV can be worth real rate. The ratio also moves on its own: every payment amortizes the balance down (the mortgage calculator shows that schedule year by year), while the market moves the denominator in either direction. An LTV computed on last year's value is already stale, which is why lenders re-appraise and why it is worth re-checking before you plan a refinance.

Common mistakes

Using the purchase price as the value understates equity on anything held through a rising market and overstates it in a falling one — the ratio is against current value, full stop. Quoting the original loan amount instead of the payoff balance ignores every payment made since closing. Forgetting the HELOC is the classic combined-LTV error: an open line, even partly drawn, is a lien a refinancing lender will count. And treating low LTV as an achievement rather than a resource cuts the other way — equity earning nothing is a choice, and knowing the ratio is how you notice you are making it. Refinances, recasts and rate changes all move this number; recording them as loan events is what keeps the balance side true over the years.

A lender evaluating any new loan reads LTV across everything you own at once. The free Schedule of Real Estate Owned generator computes it per property and for the portfolio, in the document underwriters actually request.