Loan-To-Value Ratio (LTV)

The ratio of the loan amount to the total value of the asset. For example, a $20 million loan for a property that is valued at $40m million would have an LTV of 50%. Because the cost of debt is normally lower than the cost of equity, a higher LTV is often associated with the potential for higher returns, however carries higher risk.

Commerical Real Estate Glossary

Explore more answers to commonly used real estate investing terminology