leverage - the use of any amount of borrowed funds to purchase an investment property, especially the use of a very large percentage of borrowed funds to acquire property in order to preserve capital, achieve higher returns on funds invested, and risk the least amount of equity. Leverage is usually described as the ratio between borrowed funds (debt) and a borrower's own funds (equity). Loan-to-value ratios are the primary criteria for measuring leverage. See also loan-to-value ratio.

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