Loan-to-Value (LTV) measures how much you’ve borrowed compared to your collateral.
How LTV is calculated
LTV = (Loan amount + accrued interest) ÷ collateral value
Why LTV matters
Your LTV determines:
- Your risk level
- When you receive warnings
- When liquidation may happen
Why LTV changes
Your LTV can change because the value of your collateral can move up or down.
Your LTV increases when:
- Interest accrues
- Collateral value decreases
Your LTV decreases when:
- You repay your loan
- You add more collateral