Loan to value expresses the size of a loan as a percentage of the value of the asset securing it. For example, a USD 70m loan against a USD 100m asset is 70% LTV. Lower LTV means more equity at risk before the lender, and generally lower lending risk.
LTV is a primary lever in sizing real estate and asset-backed debt and in setting pricing.
Used across real estate finance, land finance and secured lending.
Loan to value expresses the size of a loan as a percentage of the value of the asset securing it. For example, a USD 70m loan against a USD 100m asset is 70% LTV. Lower LTV means more equity at risk before the lender, and generally lower lending risk.
Used across real estate finance, land finance and secured lending.
No. Loan to value compares a loan with the value of the asset securing it, whereas loan to cost compares the loan with the total cost of acquiring or building that asset. Development lenders often consider both measures, because the cost of a project and its end value can differ significantly.
A lower loan to value means more equity sits at risk before the lender, which generally supports better pricing and lighter conditions. A higher LTV increases the lender’s exposure if values fall, so it usually carries higher pricing, tighter covenants and stronger security. LTV is a primary lever in sizing secured debt.
Speak to a partner about how this applies to your transaction.
