CLTV Explained for Investment Property Second Mortgages

CLTV, combined loan-to-value, is every loan against a property added together and divided by what the property is worth. On a second mortgage it is the limit that matters most, because it sets how much you can borrow.

CLTV vs LTV

LTV counts one loan against the value. CLTV counts all of them. If you have a first mortgage and add a second, LTV looks at one, CLTV looks at both. Fannie Mae's Selling Guide (section B2-1.2-04, accessed 2026-10-06) says a lender must consider all subordinate liens secured by the property when it calculates CLTV. For purchase-money math, see LTV vs LTC.

How much equity can I take out of my rental property?

CLTV = (first mortgage balance + any other liens + the new second) / property value

Working backward from the cap gives the largest second:

Maximum second = (value x CLTV limit) - existing liens

Typical terms for our second mortgage program allow up to 80% CLTV on investment properties, subject to underwriting.

Three worked examples

These use illustrative numbers, not a quote.

• A normal fit. Value $400,000, first $180,000. $400,000 x 80% = $320,000. $320,000 - $180,000 = $140,000 maximum second. That is inside the $50,000 to $1,000,000 loan range.
• Too little room. Value $400,000, first $290,000. $320,000 - $290,000 = $30,000. That is under the $50,000 typical minimum, so the deal does not fit.
• Hitting the loan-size ceiling. Value $2,000,000, first $500,000. $2,000,000 x 80% = $1,600,000. $1,600,000 - $500,000 = $1,100,000 by CLTV, but typical loans top out at $1,000,000. The ceiling, not CLTV, decides.

How much value you need to clear the minimum

Turn the formula around. To get a second of at least $50,000 over a $180,000 first, total debt has to reach $230,000 ($180,000 + $50,000). Divide by 0.80: $230,000 / 0.80 = $287,500. The rental has to be worth roughly that much or more, as the lender values it. Separately, the property has to be worth at least $100,000 to qualify.

Things that move your CLTV

• The lender's valuation. The number that counts is the value the lender uses, not what you think the rental is worth. We may use an automated valuation (AVM), and a full appraisal can still be required depending on the findings and the LTV. If a valuation comes in at $380,000 on the first example, $380,000 x 80% = $304,000, and $304,000 - $180,000 leaves $124,000, $16,000 less than before.
• All liens, not just the first. Any other lien on the property counts toward the total, including a home equity line already open against it. Ask how an open line of credit would be counted, by its limit or its balance.
• The loan being new. The second you are applying for is part of the count. CLTV is measured after it closes.

What CLTV does not tell you

The cap is a ceiling, not a promise. "Up to 80%" means a file can come in lower, because every loan is conditional on the borrower and the property. A cap alone does not make a loan a good one. Check that you can carry both payments from the rent, and see the notes on second mortgage vs cash-out refinance.

This is business-purpose lending on non-owner-occupied investment property. Use the second mortgage calculator to run your own value and balances. For what lenders ask for beyond CLTV, see second mortgage requirements for an investment property. For the basics of how the loan works, start with what a second mortgage on an investment property is.

Business-purpose lending only, on non-owner-occupied investment property. Not a commitment to lend. Terms shown are typical and subject to underwriting.