Investment

Loan-to-value (LTV)

Ratio of the loan to the property's value.

The loan-to-value indicates what proportion of the market value is financed through debt. Banks generally apply a lower maximum LTV to commercial property than to residential property, indicatively 60%–75%.

Frequently asked questions about Loan-to-value (LTV)

What does Loan-to-value (LTV) mean?

Ratio of the loan to the property's value.

How does Loan-to-value (LTV) work in commercial real estate?

Related terms in investment

WALT (Weighted Average Lease Term)

Weighted average remaining lease term.

Sale and leaseback

Sale with an immediate leaseback.

Leverage (financial gearing)

Effect of debt on returns.

Investor (commercial property)

Buyer focused on rental returns.

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