Enter your purchase price and property value to check your loan-to-value ratio and get a plain-English safety rating.
Fill in the loan details above and click Calculate to see your LTV results.
LTV (Loan-to-Value) is the single most important safety metric in note investing. It tells you how much of the property's value is covered by the debt — and how much cushion you have if things go wrong.
| LTV Range | Safety Rating | What It Means |
|---|---|---|
| Under 65% | Strong | Excellent cushion. Property can drop significantly and you're still protected. |
| 65% – 75% | Good | Solid protection. This is the standard range most note investors target. |
| 75% – 85% | Caution | Thin cushion. A modest drop in property value puts your principal at risk. |
| Over 85% | Risky | Very little equity. Any decline in property value could mean a loss. |
This calculator shows your LTV based on what you pay — not the UPB. Since you're buying at a discount, your LTV will always be lower than the borrower's original LTV, which is one of the key advantages of buying discounted notes.
The LTV formula itself is simple division — the hard part is trusting the property value you plug in. Sellers and brokers sometimes lean on outdated tax assessments, Zillow "Zestimates," or their own optimistic guess. None of those are reliable enough to base a purchase decision on. Before you finalize any note purchase, get a broker price opinion (BPO), a recent appraisal, or at minimum pull comparable sales yourself. An LTV calculation is only as trustworthy as the property value behind it — garbage in, garbage out.
LTV and yield answer two different questions. Yield tells you what you'll earn if everything goes as planned. LTV tells you how protected you are if it doesn't — if the borrower stops paying and you end up foreclosing and reselling the property. A note with a great yield but a dangerously high LTV is a note where you're betting everything on the borrower never missing a payment. The strongest deals score well on both metrics at once.
LTV is the number I check right after yield, before I get emotionally attached to any deal. I spent years as a licensed general contractor looking at properties up close, and that experience taught me one thing clearly: paper values and real-world values don't always match. A house can look fine in a listing photo and need $20,000 in deferred maintenance the seller conveniently left out.
My rule: I never take a seller's stated property value at face value. I pull comps myself or get a BPO before I commit real money. A note with a 65% LTV on an inflated property value isn't actually a 65% LTV deal — it's a much riskier deal wearing a safe-looking number.