Definition
CLTV combines all loans on a property (first mortgage plus piggyback loans or HELOCs) as a percentage of property value. It's particularly relevant when using piggyback loans to avoid PMI. Lenders use CLTV to assess overall risk.
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CLTV is particularly relevant for borrowers using piggyback loans to avoid PMI. For example, an 80/10/10 loan structure has a first mortgage at 80% LTV and a piggyback loan at 10% LTV, resulting in a 90% CLTV. Lenders use CLTV to determine risk.
Pro Tip
Piggyback loans can eliminate PMI but often carry higher rates; compare total costs of piggyback loans versus PMI before deciding.
Example
A $500,000 home with a $400,000 first mortgage and $50,000 piggyback loan has a CLTV of 90% ($450,000 ÷ $500,000).