Health factor is the most important number for anyone borrowing on Aave. It tells you how far your position is from liquidation — and it changes every second as asset prices move.
Aave calculates health factor as (Σ collateral × liquidation threshold) / total debt, all valued in USD.
Each collateral asset has its own liquidation threshold set by Aave governance. With $10,000 of ETH (threshold 82.5%) and $6,000 of debt, your health factor is (10,000 × 0.825) / 6,000 = 1.375.
Above 2.0 is comfortable — the position can absorb roughly a 50% collateral drop. 1.5–2.0 is moderate risk.
1.0–1.5 is elevated risk: consider adding collateral or repaying. Below 1.0 the position can be liquidated immediately.
Even if you do nothing, health factor moves: your collateral price falls, your borrowed asset rises, or interest accrues on the debt — each one lowers it.
LTV caps how much you can borrow. The liquidation threshold — always higher than the LTV cap — is what triggers liquidation, giving you a buffer between your borrowing limit and the danger zone.
Fluid applies the ratio per vault rather than across the whole account. Each vault has its own collateral, debt and liquidation threshold; our calculator reads them via the VaultResolver contract.
Add collateral, repay part of the debt, or switch to collateral with a higher liquidation threshold. During a crash, repaying debt is the fastest fix.