Borrow Health Factor Calculator
The health factor condenses the safety of a DeFi borrow position into one number: collateral value times the liquidation threshold, divided by debt. Above 1 the position is solvent; at 1 or below it can be liquidated. This calculator takes your collateral value, the weighted liquidation threshold, and your outstanding debt, then returns the health factor, the current loan-to-value, and the maximum collateral price drop you can withstand before liquidation becomes possible.
Health factor formula
Health factor = collateral value * (threshold / 100) / debt
Current loan-to-value = debt / collateral value * 100
Max safe drop = (1 - 1 / health factor) * 100
Liquidation possible when health factor <= 1
A health factor above 1 means the position cannot be liquidated at current prices. The max safe drop is how far the collateral can fall before the health factor hits 1.
Using the result
- Keep a buffer well above 1; volatile collateral can fall fast.
- Repaying debt or adding collateral raises the health factor.
- Accrued borrow interest lowers the health factor over time even if prices are flat.
- The liquidation threshold is set per asset by the protocol and may differ from the borrow limit.
- Protocols use oracle prices that can differ from the spot price on exchanges.
Health factor: frequently asked questions
What is a health factor in DeFi lending?
The health factor is a single number summarizing how safe a borrow position is. It equals the collateral value times the liquidation threshold, divided by the total debt. A health factor above 1 is solvent; at or below 1 the position can be liquidated. Higher is safer.
How is the health factor calculated?
Health factor equals collateral value times the weighted liquidation threshold (as a decimal), divided by the borrowed amount. For example, $20,000 of collateral with an 80 percent threshold against $10,000 of debt gives 20,000 times 0.80 divided by 10,000, which is 1.6.
What health factor is considered safe?
Any value above 1 avoids liquidation, but most borrowers keep a buffer well above 1, often 1.5 to 2 or higher, because collateral prices move quickly and accrued interest erodes the factor over time. The right buffer depends on the volatility of your collateral and how actively you monitor.
What does the maximum safe price drop mean?
It is the percentage the collateral price can fall before the health factor reaches 1 and liquidation becomes possible. It equals one minus the reciprocal of the current health factor, as a percentage. A health factor of 2 tolerates a 50 percent drop; a health factor of 1.25 tolerates only 20 percent.
Does a health factor above 1 guarantee safety?
No. Health factor uses oracle prices that can lag the market, interest accrues and raises debt continuously, and governance can change thresholds. A factor above 1 means not currently liquidatable, not permanently safe. Monitor the position and keep a comfortable buffer.
Official sources
- Ethereum.org: Decentralized finance lending and collateral.
- U.S. CFTC: Digital assets education center.
Reviewed by the CalculatorHub team, edited by James Graham, 17 June 2026. See our methodology.