The ratio of debt to property value; higher LTV means more leverage and risk.
Related terms
- Mezzanine debt
Subordinated financing that sits between senior debt and equity, at a higher cost.
- Mortgage
A loan secured against real property, repaid over a set term.
- Mudaraba
A Sharia-compliant profit-sharing arrangement where one party provides capital and the other provides management, splitting profits by agreed ratio while the c…
- Murabaha
A Sharia-compliant financing where the bank buys an asset and resells it to the client at a disclosed cost-plus markup payable in instalments, substituting a f…
- Musharaka
A Sharia-compliant joint venture where partners contribute capital and share profits by agreement and losses in proportion to capital; a diminishing musharaka…
- Non-recourse loan
A loan secured only by the property itself, so the lender's remedy on default is limited to seizing the asset; rarer and more expensive in emerging markets whe…
- Preferred equity
Equity that sits senior to common equity in the capital stack, receiving a fixed return and priority on distributions before common holders, but subordinate to…
- Recourse loan
A loan where the lender can pursue the borrower's other assets or guarantors beyond the pledged property if the collateral does not cover the debt — the norm f…