Guide
How to calculate your liquidation price
One line of arithmetic tells you how far the market can fall before part of your collateral is sold. Here is the formula, live examples for every asset we accept, and the four things that move the number.
Your liquidation price is the price of your collateral at which part of it would be sold to protect the loan. You can work it out before you borrow with one line of arithmetic, and you can move it afterwards. Here is how, with live figures for every asset we accept.
The formula
Your loan-to-value (LTV) is what you owe divided by what your collateral is worth. The amount you owe does not move with the market, so the only way your LTV climbs to the liquidation threshold is through a fall in the price of the collateral. Solve for that price and you get:
Liquidation price = price today × LTV today ÷ liquidation threshold
At Lombard Private, the partial-liquidation threshold is 80% for bitcoin, ether and Solana, and 92% for USDT and USDC.
Example. Borrow €25,000 against bitcoin at 50% LTV, with bitcoin at €73,814: you pledge 0.6774 BTC, and your liquidation price is €73,814 × 50% ÷ 80% = €46,134. Bitcoin would have to fall 37.5% before anything is sold.
Once the loan is running, the same price is easier to compute from the amounts themselves:
Liquidation price = amount owed ÷ (quantity pledged × liquidation threshold)
Here: €25,000 ÷ (0.6774 × 80%) = €46,134. And the fall it takes is always 1 − LTV today ÷ threshold: 1 − 50% ÷ 80% = 37.5%, whatever the price.
Warning and margin-call prices
A sale is the last of four steps. Each threshold has its own price, computed with the same formula, and the first two give you time to act.
| Loan-to-value reaches | Bitcoin price | Fall from today |
|---|---|---|
| 65% · Early warningAlert in your client area | €56,780 | −23% |
| 70% · Margin call72 hours to act | €52,725 | −29% |
| 80% · Partial liquidationBack to 65% | €46,134 | −38% |
| 90% · Full liquidationSurplus returned to you | €41,008 | −44% |
For the example above: €25,000 against 0.6774 BTC, bitcoin at €73,814 (reference price at 04:58 UTC).
The margin-call price is the one to watch. When it is reached, you have 72 hours to add collateral or repay part of the loan, and either action moves every price in this table down. If the price keeps falling and reaches the liquidation threshold within those 72 hours, the partial liquidation takes place without waiting for the period to end.
Examples for each asset
The formula is the same for every asset; the loan-to-values on offer and, for stablecoins, the thresholds differ. With live reference prices and the middle loan-to-value option of each asset:
| Collateral | Margin call | Partial liquidation |
|---|---|---|
| BTC50% LTV | €52,725 −29% | €46,134 −38% |
| ETH40% LTV | €1,273 −43% | €1,113 −50% |
| SOL30% LTV | €42.03 −57% | €36.78 −63% |
| USDC65% LTV | €0.6673 −25% | €0.6311 −29% |
Prices in euros, reference prices at 04:58 UTC. USDT works like USDC. Stablecoin thresholds are higher because their prices are designed not to move: early warning at 84%, margin call at 87%, partial liquidation at 92%, full liquidation at 95%.
How far can prices fall?
You do not need a price to judge a loan’s safety. The fall that triggers each event depends only on the loan-to-value you start from:
| Starting LTV | Margin call | Partial liquidation |
|---|---|---|
| 20%BTC, ETH, SOL | −71% | −75% |
| 30%BTC, ETH, SOL | −57% | −63% |
| 40%BTC, ETH, SOL | −43% | −50% |
| 50%BTC, ETH | −29% | −38% |
| 60%BTC | −14% | −25% |
Bitcoin, ether and Solana. Under each loan-to-value, the assets for which it is available.
A useful rule of thumb follows from the formula: every 10 points of loan-to-value you leave unused buy about 14.3 points of price fall before a margin call, and 12.5 points before a partial liquidation. The maximum loan-to-value is a ceiling, not a target.
For USDT and USDC, the thresholds sit higher and the cushions are narrower, because a stablecoin is not expected to move:
| Starting LTV | Margin call | Partial liquidation |
|---|---|---|
| 50% | −42.5% | −45.7% |
| 65% | −25.3% | −29.3% |
| 80% | −8.0% | −13.0% |
Lowering it: top-ups
Adding collateral increases the quantity pledged, so the same debt is spread over more coins:
New liquidation price = amount owed ÷ ((quantity pledged + top-up) × threshold)
Add 0.17 BTC to the loan above and you pledge 0.8474 BTC: your loan-to-value falls to 40% and your liquidation price from €46,134 to €36,879. A top-up is the quickest answer to a margin call; it counts as soon as the network confirms it (2 confirmations for bitcoin). Top-ups are possible at any time, not only during a margin call.
Lowering it: repayments
Repaying part of the loan reduces the debt the collateral has to cover:
New liquidation price = (amount owed − repayment) ÷ (quantity pledged × threshold)
Repay €5,000 of the €25,000: your loan-to-value falls to 40% and your liquidation price by a fifth, to €36,907. Repayments are free at any time, in full or in part, by bank transfer in your loan currency or in USDT or USDC.
Which to choose? A top-up keeps your cash but ties up more of your crypto; a repayment uses cash but lowers the interest you pay from then on. Neither costs a fee.
Accrued interest
Interest accrues daily on what you owe. If you pay it monthly, the amount owed stays where it is, and so does your liquidation price. If you let it accrue, it is added to what you owe and your liquidation price rises at the pace of your rate:
Amount owed after t days = amount borrowed × (1 + APR × t ÷ 365)
At 10.9% APR, twelve months of accrued interest turn €25,000 into €27,725, and the liquidation price rises by the same 10.9%, from €46,134 to €51,163. Your client area shows the current figure at all times.
The exchange rate
Your liquidation price is expressed in your loan currency. If you borrow euros against bitcoin, what counts is bitcoin’s price in euros, which moves with bitcoin’s dollar price and with the euro–dollar exchange rate. A weaker dollar lowers bitcoin’s euro price even when its dollar price does not move.
For a loan in euros, pounds or Swiss francs backed by dollar stablecoins, the exchange rate is the main risk. The loan-to-value moves in proportion to the exchange rate:
Stablecoins against a euro loan
Starting at 80% loan-to-value against USDC, with EUR/USD at 1.1194, a rise of the euro to 1.2174 (+8.75%) would trigger a margin call, and a rise to 1.2874 (+15%) a partial liquidation, even if USDC kept its peg. Borrowing in US dollars removes this effect.
How much is sold in a partial liquidation
Only what is needed to bring the loan-to-value back to 65%, after the 1% fee on the amount sold. The quantity is:
q = (D − t × Q × P) ÷ (P × (1 − t − f))
q: quantity sold · D: amount owed · Q: quantity pledged · P: sale price · t: target loan-to-value (65%) · f: liquidation fee (1%)
If the sale takes place exactly at the 80% threshold, that is about 44.1% of the collateral, whatever the asset or the amount. In our example, 0.2988 BTC would be sold at €46,134, leaving 0.3785 BTC pledged against a debt reduced to €11,351.
Why the margin call matters
In a fast market, the sale price can be lower than the threshold price, and the quantity sold correspondingly larger. Answering a margin call costs nothing; a liquidation costs 1% of the amount sold and sells at a low point. At 90%, or if the loan is in default, all the collateral may be sold, with a 2% fee; any surplus is returned to you.
Check your own numbers
The liquidation price calculator applies all of the above to any amount, asset and loan-to-value, with live prices, and shows what each fall in price would mean for your loan. Our liquidation policy sets out the rules in full.
Questions
Liquidation price: common questions
Short answers to the questions borrowers ask most often.
Help centreWhat is a liquidation price?
It is the price of your collateral at which your loan reaches the threshold where part of the collateral is sold. With Lombard Private, that threshold is a loan-to-value of 80% for bitcoin, ether and Solana, and 92% for USDT and USDC.
How do I calculate the liquidation price of a crypto loan?
Multiply the price of the collateral when you borrow by your loan-to-value, then divide by the liquidation threshold. Borrowing at 50% with bitcoin at €73,814, the partial-liquidation price is €73,814 × 50% ÷ 80% = €46,134.
What is the difference between the margin-call price and the liquidation price?
The margin-call price comes first, at 70% loan-to-value: you are asked to add collateral or repay part of the loan within 72 hours. The liquidation price, at 80%, is where part of the collateral is sold if the loan-to-value has not been brought back down.
Can my liquidation price change after I borrow?
Yes. It falls when you add collateral or repay part of the loan, and it rises if unpaid interest is added to what you owe. Expressed in your loan currency, it does not move with the market: what moves is the price of your collateral.
Is all my collateral sold at the liquidation price?
No. At the partial-liquidation threshold, only the amount needed to bring the loan-to-value back to 65% is sold, about 44% of the collateral if the sale takes place exactly at the threshold. Everything is sold only at 90%, or if the loan is in default, and any surplus is returned to you.
How can I lower my liquidation price?
Borrow at a lower loan-to-value from the start, add collateral, or repay part of the loan. Paying interest monthly rather than letting it accrue also stops the liquidation price from creeping up over time.
Do stablecoin loans have a liquidation price?
Yes. It is the stablecoin price, in your loan currency, at which the loan-to-value reaches 92%. For a loan in euros, pounds or Swiss francs, it can be reached through a fall of the US dollar against your loan currency as well as through a loss of peg.
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