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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.

Check your mortgage eligibility and equity position.

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).

Loan to Value (LTV) Calculator

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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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