π LTV Calculator: Loan to Value Ratio
Your loan as a percentage of the property value.
Loan-to-value ratio
Estimates for planning only, not financial advice.
Loan-to-value is the lender's safety margin expressed as one number: the loan divided by the property value. A $400,000 loan on a $500,000 property is an 80 percent LTV, leaving 20 percent borrower equity ahead of the lender's money. Cross above 80 percent and private mortgage insurance appears; fall far below it and the best rates open up. This calculator computes LTV, equity, the PMI verdict, and the maximum loan at 80 percent.
LTV is the first ratio every mortgage decision runs through, before credit scores or income. It quantifies who loses first if prices fall, and lenders price everything else around the answer.
How to Use This Calculator
Enter the loan amount and the property value. For purchases, lenders use the lower of price and appraisal; for refinances, the appraisal. The calculator returns LTV, equity, and whether PMI is likely.
Enter the loan amount you need, including any financed closing costs.
Enter the property value: purchase price or appraised value, whichever is lower for a purchase.
Read the LTV and the PMI verdict. If PMI looks likely, our PMI removal calculator shows the path to dropping it.
The Formula
Combined LTV matters whenever a second lien exists. A borrower with an 80 percent first mortgage and a 10 percent HELOC sits at 90 percent CLTV, which is the total debt load the lender actually faces. Home equity lenders cap CLTV, often at 80 to 90 percent, which limits how much can be borrowed against appreciated homes.
LTV Benchmarks
| LTV | Meaning | Typical consequence |
|---|---|---|
| At or below 60% | Deep equity | Best rates, easy approval |
| 80% | The magic line | No PMI on conventional loans |
| 80 to 90% | Thin cushion | PMI required, rate adjustments |
| Above 95% | Minimal skin in the game | FHA/VA territory, highest costs |
| Above 100% | Underwater | Cannot sell or refinance cleanly |
The 80 percent line dominates because it is contractual, not just advisory: PMI rules, pricing grids, and cash-out caps all pivot on it. Borrowers near the line should model both sides before locking, since a slightly larger down payment can pay for itself in months through PMI savings alone. For the monthly payment behind any LTV, our mortgage payment calculator includes taxes and insurance.
Worked Example
With the defaults: $400,000 loan on a $500,000 property. LTV is 400,000 / 500,000 x 100 = 80.0 percent. Equity is $100,000, or 20.0 percent. PMI is not required at exactly 80 percent on a conventional loan. The maximum loan at 80 percent LTV is $400,000, so any price increase or larger loan would push above the line. If the appraisal came in at $480,000 instead, LTV would be 83.3 percent and PMI would apply.
Managing Your LTV
Three levers move it: bigger down payment at purchase, extra principal payments after, and market appreciation doing the work for free. Track it annually, because crossing 80 percent downward is a call to action: request PMI cancellation and shop a refinance. Conversely, watch it in falling markets, since slipping toward 100 percent quietly removes your exit options.
My rule: treat 80 percent as a ceiling to get under, not a target to hit exactly. Appraisals vary, markets move, and the borrower sitting at 80.0 percent on paper is one soft appraisal away from PMI. A point or two of margin is cheap insurance.
LTV Bands and What They Cost You
LTV is not just a ratio; it is a pricing grid. At 80 percent and below you get the best rates and no mortgage insurance. From 80 to 90, expect private mortgage insurance around $30 to $70 per $100,000 borrowed monthly plus a small rate add-on. From 90 to 95, PMI climbs and some lenders add loan-level price adjustments. Above 95, you are in FHA or VA territory with upfront and annual mortgage insurance premiums that persist for years.
The fastest way to improve your band is a bigger down payment, but the second fastest is a better appraisal: a $20,000 higher valuation on a $400,000 loan drops LTV by nearly 4 points. Some buyers negotiate seller credits toward the down payment or use gift funds, both allowed with documentation. Track your LTV after purchase too, because once it hits 80 percent on a conventional loan you can request PMI cancellation, and at 78 percent it drops automatically. Our PMI removal calculator finds your cancellation date.
LTV After Purchase
Your LTV keeps working after closing. Paying down principal and home appreciation both push it lower, and at 80 percent you can request PMI cancellation on conventional loans. Track it yearly with a rough valuation; many borrowers pay PMI months longer than necessary simply because they never checked.
Estimates for planning only, not financial advice.Frequently Asked Questions
What is loan-to-value ratio?
LTV is the loan amount divided by the property's appraised value or purchase price, times 100. A $400,000 loan on a $500,000 home is an 80 percent LTV. It measures the lender's cushion: lower LTV means more borrower equity at risk ahead of the lender's money.
How do you calculate LTV?
Divide the loan amount by the property value and multiply by 100. Lenders use the lower of the purchase price and the appraised value as the value. For refinances there is no purchase price, so the appraisal alone sets the denominator.
What is a good LTV ratio?
Eighty percent or below is the classic target: it avoids private mortgage insurance on conventional loans and earns the best rates. Below 60 percent is excellent and unlocks the very best pricing. Above 90 percent is possible with FHA, VA, or USDA loans but costs more in insurance and rate.
Why does 80 percent LTV matter?
It is the PMI threshold. Conventional lenders require private mortgage insurance above 80 percent LTV to protect against default losses, adding $30 to $70 per month per $100,000 borrowed. At 80 percent or below, PMI drops off, which is why 20 percent down is the traditional advice.
What is combined LTV (CLTV)?
CLTV includes all loans against the property: first mortgage plus HELOC or second mortgage, divided by value. A $400,000 first mortgage plus a $50,000 HELOC on a $500,000 home is a 90 percent CLTV. Lenders check CLTV because junior liens raise total borrowing against the home even when the first mortgage looks safe.
Can LTV exceed 100 percent?
Yes, when the loan balance tops the property value, the borrower is underwater. It happens after price declines with small down payments, or when closing costs are rolled into the loan. Underwater borrowers cannot sell without bringing cash or doing a short sale, and refinancing options narrow sharply.
How does LTV affect my mortgage rate?
Lenders price in LTV bands: 60, 70, 75, 80, 85, 90, and 95 percent are common breakpoints. Each step down can shave a fraction off the rate through lower risk adjustments. The jump from 81 to 80 percent LTV is the most valuable single point because it also kills PMI.
Does LTV change after I buy?
Constantly. Every payment reduces the loan balance while home values move with the market, so LTV drifts down over time even without extra payments. When it reaches 80 percent through payments alone, you can request PMI cancellation; at 78 percent it must drop automatically on most conventional loans.
What LTV do investors need for rental property?
Higher down payments: most lenders cap investment-property LTV at 75 to 80 percent, meaning 20 to 25 percent down. Rates also run above owner-occupied pricing. House hacking an owner-occupied multi-unit can access the friendlier residential LTV limits.
How is LTV used in refinancing?
It decides eligibility and pricing. Rate-and-term refinances are easiest below 80 percent LTV; cash-out refinances usually cap at 80 percent. A low LTV from appreciation can let you refinance into a better rate and drop PMI in one move, which is why homeowners watch values as closely as rates.