LTV vs. LTC: How Much Can You Borrow?
Understand loan-to-value and loan-to-cost, how lenders use each and how they shape your down payment.
By the CFUND advisory team · 4 min read
Loan-to-Value
LTV = Loan ÷ Appraised Value. A $750,000 loan on a $1,000,000 property is 75% LTV. Lower LTV means more equity, less risk and usually better terms.
Loan-to-Cost
LTC = Loan ÷ Total Project Cost. If land, construction and soft costs total $2,000,000 and the loan is $1,700,000, that's 85% LTC.
Why both matter
A lender might offer 85% of cost but cap the loan at 70% of the finished value. Whichever number is lower sets your loan amount — and your equity requirement. Running both before you make an offer avoids surprises.