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What is CLTV in a mortgage?
Combined loan-to-value (CLTV) is the ratio of the combined balances of all loans secured by a property to the property's value, expressed as a percentage. It's used when a property carries more than one lien, such as a first mortgage plus a second mortgage or HELOC.
LTV measures a single loan, so it can understate leverage once a second lien is involved. CLTV shows total debt against the property, which is what a second-lien lender, or a first-lien lender allowing subordinate financing, looks at.
When a HELOC is involved, some guidelines also use HCLTV, which counts the full credit line rather than the drawn balance.
The formula
CLTV
=
First lien + second lien + other liens
Property value
A $300,000 first mortgage plus a $50,000 second on a $500,000 property is a 70% CLTV.
