Borrower needs 85% LTV on $500,000 property. Required down payment?

Correct answer: $75,000

Down payment = Property Value × (1 − LTV). At 85% LTV, the loan covers 85% of the value, so the borrower must cover the remaining 15%. Down payment = $500,000 × 15% = $75,000. Loan amount = $500,000 × 85% = $425,000. At 85% LTV, PMI will be required on a conventional loan since LTV exceeds the 80% threshold.