Combined Loan-to-Value Ratio (CLTV) Definition


What is the CLTV ratio?

The Combined-Loan-to-Value (CLTV) ratio is a metric that helps lenders understand the total amount of risk they will be taking on when lending to a borrower. Unlike the LTV ratio, the CLTV ratio takes into consideration all of the borrower’s debt obligations. This is a more comprehensive perspective of the total risk a lender will be accepting by lending to this borrower.

How is it useful?

The ratio answers vital questions for lenders such as:

  • What is the minimum down payment?
  • What is the interest rate?
  • How much risk does this deal hold?
  • What is the loan amount?
  • How much skin will the borrower have in the deal?
  • How much skin will the lender have in the deal?
  • Does the borrower have any other liabilities and debt obligations?
  • Can the borrower afford this loan?

How do lenders calculate the CLTV ratio?


Formula allows for the loan analysis to encompass all of the borrower’s liabilities and debt obligations. This protects both the lender and borrower from accepting risk that can’t be managed.


CLTV = 79%
CLTV = $790,000 / $1,000,000

Appraised Values = $1,000,000
Property 1 = $450,000
Property 2 = $350,000
Property 3 = $200,000

Total Debt = $790,000
Property 1 = $350,000
Property 2 = $300,000
Property 3 = $120,000
Car 1 = $15,000

What does a 79% CLTV ratio mean?

The lender will provide 79% of the funds needed to acquire or refinance the properties. The borrower will need to provide the remaining 21% of the capital. At times, lenders will approve loans with a CLTV above 80% if their FICO score/credit rating is high.

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