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Loan to Value (LTV) Calculator

Enter the loan amount and property value to see your LTV ratio. Lower LTVs usually qualify for better interest rates.

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LTV Ratio

80%

RecommendedCheck loan limits
LTV Ratio80.00%
Equity Value$80000
Equity Percentage20.00%
Risk LevelLow Risk

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Quick answer

Loan-to-Value (LTV) ratio compares the size of your loan to the value of the asset. The formula is **LTV = (Loan Amount / Appraised Property Value) × 100**. A ratio below 80% often avoids Private Mortgage Insurance (PMI).

Check your mortgage eligibility and equity position.

How It Works

  1. Determine the **Appraised Value** of the property (not just the purchase price).
  2. Identify the total **Loan Amount** you are requesting.
  3. Divide the Loan Amount by the Appraised Value.
  4. Multiply by 100 to get the percentage.

Formula:

LTV = (Loan Amount / Property Value) × 100

What is Loan-to-Value (LTV)?

The Loan-to-Value (LTV) ratio is a key metric lenders use to assess the risk of a mortgage. It measures how much you are borrowing relative to the home's worth. - **High LTV (>80%)**: Indicates higher risk for the lender. Usually triggers Private Mortgage Insurance (PMI). - **Low LTV (<80%)**: Indicates more equity and less risk. Often results in better interest rates.

LTV Cheat Sheet

- **80% LTV**: The "Magic Number". Below this, you avoid PMI on conventional loans. - **97% LTV**: Maximum for standard conventional first-time buyer programs. - **96.5% LTV**: Standard limit for FHA loans. - **100% LTV**: VA loans and USDA loans allow this (0% down).

Examples

Example A: Standard Conventional Loan

Result: Price $300k, Loan $240k. LTV = 240/300 = 80%. (Safe)

Example B: FHA Loan

Result: Price $200k, Loan $193k. LTV = 96.5%. (Requires PMI)

Frequently Asked Questions

What is a good LTV ratio?

80% or lower is considered "good" because it avoids PMI and secures lower rates. However, 90-95% is very common for first-time buyers.

Does LTV use purchase price or appraised value?

Lenders use the **lower** of the two. If you agree to buy for $300k but it appraises for $290k, the LTV is based on $290k.

Can LTV affect my refinance?

Yes. Most cash-out refinances limit you to 80% LTV. Rate-and-term refinances may allow up to 95-97%.

How do I lower my LTV?

You can lower LTV by making a larger down payment, paying down the principal balance, or waiting for property value to appreciate.

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