What is loan-to-value (LTV) in crypto lending?
Loan-to-value compares what you've borrowed with what your collateral is worth. Max LTV, liquidation thresholds and LLTV explained, with an example.
Updated Nov 8, 2026
In short
Loan-to-value (LTV) is what you owe divided by what your collateral is worth. Borrow $6,000 against $10,000 of ETH and your LTV is 60%. Lending protocols set a maximum LTV for new borrowing and a higher threshold at which a loan can be liquidated. The gap between your LTV and that threshold is your safety margin.
How it's worked out
LTV = what you've borrowed ÷ what your collateral is worth.
Supply $10,000 of ETH and borrow $6,000 of stablecoins: your LTV is 60%. If ETH falls 20%, your collateral is worth $8,000 and your LTV rises to 75%, with the same debt.
The three numbers that matter
- Your LTV, which moves with prices and interest.
- Max LTV, the most you can borrow against an asset in the first place.
- The liquidation threshold, or LLTV on Morpho: the LTV at which the loan can be liquidated.
Say the threshold is 80%. At a 60% LTV, your collateral can fall by a quarter before you reach it. At 75%, it can fall by only about 6%.
What it means for you
Borrowing up to the maximum leaves almost no room. Keep your LTV well below the threshold, by how much depending on how volatile your collateral is, and lower it by repaying or adding collateral when prices move against you. See how to avoid liquidation on Aave and Morpho.
In Burokku
Burokku shows every Aave and Morpho loan across your wallets with its health factor, on one scale, and alerts you when one falls below a number you choose. The Lend & borrow tool shows what a fall in prices would do to each loan.
Questions
- What's the difference between max LTV and the liquidation threshold?
- Max LTV is how much you can borrow against an asset when you open or add to a loan. The liquidation threshold is the higher level at which the loan can be liquidated. On Aave both are set per asset; on Morpho each market has one liquidation LTV, called LLTV.
- How does LTV relate to the health factor?
- They measure the same safety from opposite sides. On Aave, the health factor is roughly the liquidation threshold divided by your LTV: an 80% threshold and a 60% LTV give about 1.33. A rising LTV means a falling health factor.