LTV (Loan-to-Value Ratio)

Loan-to-value is the loan amount divided by the property’s appraised value. A $6.5M loan on a property appraised at $10M is a 65% LTV. The gap between the loan and the value is the lender’s equity cushion: if the market falls and the lender must foreclose and sell, LTV measures how far prices can drop before the bank loses principal.

Borrowers care about LTV because it determines how much cash stays in (or comes out of) a deal. Typical bank CRE lending runs 65%–75% LTV on stabilized property, lower for specialty assets like hotels or land. On a refinance, a lower appraisal or tighter LTV policy can force a "cash-in" refi — bringing money to the closing table just to replace an existing loan. In practice, the final loan size is the lesser of what LTV allows and what DSCR allows, and in a high-rate environment DSCR usually binds first.

LTV appetite is one of the terms we log in each lender’s "Observed lending terms" module, alongside the property types the quote applied to and when we heard it.