CLTV (Combined Loan-to-Value) = (sum of all loans secured by the property) ÷ (property value). It measures total debt secured by the home as a percentage of value.
House value $400,000, first mortgage $280,000, second mortgage $40,000 → CLTV = (280,000 + 40,000) / 400,000 = 0.80 or 80%.
Formula: CLTV = (First mortgage balance + Second mortgage balance + Home equity loans + HELOC balance or credit considered) ÷ (Property value used by lender) × 100%
Lenders typically use the lower of the purchase price or the appraised value for purchases. For refinances they usually use a full appraisal, a desktop appraisal, or an automated valuation model (AVM). Program rules dictate which value wins; always confirm with your lender.
Included: first mortgage, second mortgage (home equity loans), HELOCs, and piggyback loans secured by the property. Some lenders also include subordinate lien balances such as home improvement liens if they are recorded against the title.
Two common treatments:
• Lenders count the outstanding balance only (typical CLTV): use actual owed amount.
• Lenders count the full credit limit (used in HCLTV or TLTV): assumes borrower could draw the full line. Always check whether the product uses outstanding balance or credit limit.
LTV = (first mortgage balance) ÷ (property value). Lenders use LTV for many conventional underwriting rules when only the primary loan matters.
HCLTV typically includes the first mortgage plus the maximum allowable draw on a HELOC (credit limit), not just the current outstanding balance. Lenders use HCLTV when they want to measure potential exposure if a HELOC is fully drawn.
TLTV is similar to HCLTV in practice but definitions can vary by lender. TLTV often equals first mortgage + total possible second-lien exposure (credit limits). These metrics are not always interchangeable—check the lender’s definition.
| Metric | What it counts | When used |
|---|---|---|
| LTV | First mortgage only | Standard pricing, PMI thresholds |
| CLTV | Actual balances of all loans | Combined debt underwriting |
| HCLTV | First mortgage + HELOC credit limit | HELOC approval, future-draw risk |
| TLTV | First + total possible subordinate exposure | Product-specific limits |
Higher CLTV reduces how much a lender will approve. Many programs set hard CLTV caps—exceed them and you’ll be denied or pushed to a different product.
Higher CLTV usually means higher pricing (worse rates or lender fees). Lenders price loans to reflect greater loss severity as combined leverage rises.
For conventional loans PMI rules are driven by LTV but CLTV can affect eligibility for certain programs or remove options. FHA and other programs have their own insurance schemes tied to combined exposure.
CLTV shows total secured exposure. If default occurs, recovery depends on sale proceeds minus all secured claims. Multiple liens increase lender risk and complicate loss severity calculations.
Conventional conforming lenders commonly cap CLTV at 80% to avoid PMI, allow up to 95% or 97% LTV on primary mortgage but combined exposure rules may limit CLTV to lower values depending on subordinate liens.
FHA permits higher CLTVs for insured loans but has specific rules about subordinate liens and refunds; VA and USDA have program-specific rules—VA often allows high LTV for veterans but subordinate lien treatment varies.
Jumbo and portfolio lenders set their own CLTV limits—some are more flexible (higher CLTV allowed) but with higher rates or stricter credit requirements.
Investor loans, rehab loans and DSCR products often have lower CLTV caps (e.g., 70–75%) because investment properties present higher risk.
List current outstanding balances and HELOC credit limits and current draws. Confirm whether the lender counts limits or balances.
Use the value the lender requires: purchase price for buys, appraisal or AVM for refinances. If unsure, ask the loan officer or reference program rules.
Add the included loan amounts, divide by property value, multiply by 100 to get CLTV%. Compare with lender and program limits.
Example A — Purchase with second lien: Value $500,000, first $375,000, second $25,000 → CLTV = (375,000+25,000)/500,000 = 80%.
Example B — HELOC drawn vs undrawn: Value $400,000, first $300,000, HELOC credit limit $50,000 with $10,000 drawn.
• If lender uses balances: CLTV = (300,000+10,000)/400,000 = 77.5%.
• If lender uses credit limit (HCLTV approach): HCLTV = (300,000+50,000)/400,000 = 87.5%.
It depends. Some lenders include only the outstanding balance (CLTV); others include the full credit limit (HCLTV/TLTV). Verify product rules.
Only if the new balance is lower or the new appraisal shows a higher value. A refinance that consolidates subordinate liens can lower combined exposure if the new loan pays off the second lien.
An increased appraisal or market value lowers CLTV (same debt ÷ higher value). Always request a new appraisal or AVM if market value has risen significantly before applying.
If your CLTV exceeds program limits or pushes you into a higher-risk pricing tier, the lender may deny or charge higher rates/fees. Reducing balances, getting a new appraisal, or switching products can help.
Immediate principal reduction on any subordinate lien or the first mortgage lowers CLTV. Provide payoff statements or cancelled checks to underwriters to reflect reductions.
Refinancing to pay off subordinate liens can convert multiple loans into one, often lowering combined cost and simplifying CLTV—but closing costs and qualification requirements apply.
A recent appraisal or appraisal review can raise the denominator and reduce CLTV—especially helpful in hot markets.
If a lender counts HELOC credit limits, you can request the lender close the line or reduce the limit and provide documentation so underwriters exclude the unused portion.
Applying additional funds at closing or from the sale proceeds to pay down balances lowers combined exposure immediately.
Consider portfolio lenders, portfolio loan programs, lender overlays, or negotiated exceptions. Piggyback strategies are less common now but may still apply in niche situations.
Products that allow future draws (or require HCLTV calculations) will use the HELOC limit. If your loan officer is unclear, ask for the program definition in writing.
Make sure payoff letters and recent statements are provided to show paid balances. Lenders may re-run underwriting if the borrower draws after clear-to-close; avoid post-closing draws.
If you believe the lender used an incorrect balance or value, supply documentation (payoff statements, cancelled checks, updated appraisal) and request a written reconsideration or clarification.
Jane buys a $450,000 home. First mortgage (30‑yr) = $360,000. Seller offered a recorded HELOC used as a second lien with $25,000 outstanding and $40,000 credit limit but only $25,000 drawn.
• CLTV (balances) = (360,000 + 25,000) / 450,000 = 85%.
• HCLTV (uses HELOC limit) = (360,000 + 40,000) / 450,000 = 88.9%.
Lender’s conventional product caps CLTV at 85% for the rate Jane seeks. Using balances she qualifies at the target rate but will pay PMI because LTV on the first mortgage is 80% (360,000/450,000=80%). If lender uses HCLTV, she exceeds the cap and must either pay a higher rate, reduce HELOC limit, or provide a larger down payment.
If Jane pays the HELOC to $5,000 outstanding: CLTV = (360,000 + 5,000)/450,000 = 81.1%. That keeps her inside the lender’s 85% CLTV cap and could lower pricing and PMI options.
CLTV = (sum of all loans secured by the property) ÷ (property value) — shows total secured debt as a percent of value.
Buyer: Reduce subordinate debt or request a limit reduction on HELOCs before applying.
Refinancer: Get an appraisal and provide payoff docs to show lower combined exposure.
Investor: Expect lower CLTV caps—budget for bigger down payments.
Broker: Confirm whether lender uses balances or limits and document accordingly.
Arrears are typically added to the loan balance for CLTV calculations if they’re secured and unpaid at underwriting. Deferred payments under loan modification rules may be treated per program guidelines.
Recorded subordinate liens that are secured by the property are usually considered by underwriters. Unrecorded claims may surface during title review and can affect approval.
Cash-out refinances increase the new loan balance and therefore CLTV. Underwriters limit cash-out amounts based on program CLTV caps.
Community property rules can affect who is liable for debt, but CLTV only measures secured liens on the property. Lenders will still evaluate borrower credit and may consider spousal liabilities in qualifying.
Include a CLTV calculator and a downloadable worksheet that lists each lien, balances, HELOC limits and the property value for quick computation.
Contact your loan officer or mortgage broker to confirm product-specific CLTV rules; contact an appraiser if you believe market value is higher.
Suggested internal links: LTV explained, HELOC basics, refinancing checklist.
Definition (snippet): CLTV is the Combined Loan-to-Value ratio — total of all loans secured by the property divided by the property’s value.
Formula (snippet): CLTV = (sum of loan balances secured by the property) ÷ (property value) × 100%.
HELOC rule (snippet): Some lenders count only the HELOC outstanding balance for CLTV; others count the full HELOC credit limit and use HCLTV/TLTV to measure potential exposure.
