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Loan-to-Value (LTV) Ratio Calculator

Calculate the Loan-to-Value ratio for a mortgage or property loan.

To find out your loan-to-value ratio, enter the amounts below.

Have a second mortgage or other lien on the property?

LTV Breakdown

Enter loan and property details to see results.

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Understand Your Home Equity with a Loan-to-Value (LTV) Calculator

Our LTV Calculator helps homeowners and buyers determine their Loan-to-Value ratio, a key metric used by lenders to assess risk, determine interest rates, and evaluate refinancing options.

What is a Loan-to-Value (LTV) Calculator?

A Loan-to-Value (LTV) Calculator is a financial tool that measures the relationship between the amount of money you owe on a property and the property's appraised value. It's a critical metric used by lenders to assess the risk of a mortgage. A high LTV indicates more risk for the lender, while a low LTV signifies that the borrower has more equity (ownership) in the property, making the loan less risky.

How It Works: The LTV Formula

The calculator uses a straightforward formula:

LTV (%) = (Mortgage Amount / Appraised Property Value) × 100

Combined LTV (%) = (Total of All Liens / Appraised Property Value) × 100

  1. Enter Property Value: Input the current appraised value or market value of the home.
  2. Enter First Mortgage Balance: Provide the outstanding principal on your primary mortgage.
  3. Add Other Liens (Optional): If you have a second mortgage or a home equity line of credit (HELOC), enter those balances to calculate your Combined LTV (CLTV).
  4. Calculate: The tool instantly provides your LTV and CLTV ratios.

Interpreting Your LTV Ratio

The resulting LTV percentage is a key indicator of your financial position as a homeowner:

  • LTV > 80%: Lenders generally consider this a higher risk. You will likely be required to pay Private Mortgage Insurance (PMI) on a conventional loan.
  • LTV ≤ 80%: This is the "magic number." At or below 80% LTV, you can typically request to have PMI removed, potentially lowering your monthly payment. You may also qualify for better rates on a refinance.
  • LTV < 60%: A very low LTV indicates significant home equity, which can be a valuable asset for securing a home equity loan or line of credit at favorable rates.

Common LTV Myths

  1. Myth 1: My LTV stays the same. Your LTV changes over time. It decreases as you pay down your mortgage principal and as your home's value appreciates.
  2. Myth 2: LTV is the only thing lenders care about. While LTV is critical, lenders also heavily weigh your credit score, debt-to-income ratio (DTI), and employment history when making lending decisions.
  3. Myth 3: PMI automatically disappears at 80% LTV. For conventional loans, you typically need to proactively request that your lender remove PMI once you reach 80% LTV based on the original amortization schedule. Lenders are only required to automatically terminate it when you reach 78% LTV.

Frequently Asked Questions

How is Loan-to-Value (LTV) calculated?

Loan-to-Value is calculated by dividing your mortgage loan amount by the appraised value of the property. The formula is: LTV = (Loan Amount / Appraised Value) * 100%. Our calculator handles this for you and can also calculate Combined LTV (CLTV) if you have multiple loans.

What is a good LTV ratio?

A good LTV ratio is generally considered to be 80% or lower. An LTV of 80% or less means you have at least 20% equity in your home, which allows you to avoid paying Private Mortgage Insurance (PMI) and often qualifies you for better interest rates on a refinance.

How does LTV affect my mortgage?

LTV is a key risk factor for lenders. A higher LTV indicates higher risk, which often results in a higher interest rate and the requirement to pay PMI. A lower LTV demonstrates you have more 'skin in the game' and can lead to more favorable loan terms.

What is the difference between LTV and CLTV?

LTV (Loan-to-Value) only considers your primary mortgage. CLTV (Combined Loan-to-Value) includes all loans secured by the property, such as your primary mortgage plus any home equity loans or lines of credit (HELOCs). CLTV provides a more complete picture of the total debt against the home.

Tips for Managing Your LTV

  • Make Extra Principal Payments: The fastest way to lower your LTV is to pay down your mortgage balance more quickly.
  • Get a New Appraisal: If you've made significant home improvements or live in a rapidly appreciating market, getting a new appraisal can increase your home's value and lower your LTV.
  • Avoid Second Mortgages: Taking on home equity loans increases your CLTV, which can make it harder to refinance in the future.
  • Aim for 20% Down: When purchasing a home, aiming for a 20% down payment is the best way to start with a favorable LTV and avoid PMI from the beginning.

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