Loan-to-Value (LTV)

Definition

Loan-to-Value (LTV) is the percentage of a property's value financed by debt. LTV governs how much equity must be left in a deal — it is the single most important constraint on a cash-out refinance, and the primary leverage limit on a hard money or conventional purchase.

Formula

Worked example

A $360,000 loan against a $480,000 ARV refinance = 75% LTV. If the maximum allowed LTV is 70%, only $336,000 can be borrowed — leaving $24,000 of capital trapped in the deal.

How DealIntel uses it

DealIntel models LTV constraints per financing product (hard money typically 65–75% LTC, DSCR 70–80% LTV, conventional 75% LTV cash-out) and shows the trapped-equity figure for every BRRRR scenario so the investor knows up-front how much capital actually recycles.

Related terms

• After Repair Value · ARVThe estimated market value of a property after planned renovations are complete.
• Debt-Service Coverage Ratio Loan · DSCRAn investment property loan qualified on the property's rental income rather than the borrower's W-2 income.
• Hard Money LoanShort-term, asset-collateralized real estate financing from a private lender — fast to close, higher-cost.
• Buy, Rehab, Rent, Refinance, Repeat · BRRRRA long-hold real estate strategy that recycles capital through a cash-out refinance after stabilization.

Matt Abadi is the founder of DealIntel. He leads the development of the platform's six-strategy underwriting engine, 25-point Kill List, and Monte-Carlo financial model — the institutional analysis stack DealIntel applies to every fix and flip deal. DealIntel was founded in 2025 with the central thesis that knowing when not to invest is the most valuable number on the page.