Loan-to-Value Calculator
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Enter the home's value and what you owe to get the loan-to-value ratio lenders use to price a mortgage, decide whether you need private mortgage insurance and size a refinance or home equity loan.
What Is a Loan-to-Value Ratio?
Loan-to-value (LTV) compares the amount of a mortgage with the value of the home that secures it. A $340,000 loan on a $400,000 house has an 85% LTV. The remaining 15% is your equity, the cushion that protects the lender if the home has to be sold for less than expected.
Lenders treat LTV as one of the main measures of risk, alongside credit score and debt-to-income ratio. A lower LTV generally means a lower rate, fewer fees and no mortgage insurance, while a high LTV narrows the loan programs available. This loan to value calculator shows the ratio for a new purchase, a refinance or an existing loan.
How to Use the LTV Calculator
For a purchase, enter the price (or the appraisal if it comes in lower) and the amount you plan to borrow after your down payment. For an existing home, enter a current estimate of value and the balance from your latest mortgage statement. Add the balance of any second mortgage or home equity line to see the combined figure.
Results show the LTV of the first mortgage, the combined LTV (CLTV) of every loan on the property, your equity in dollars and as a share of value, and how much principal you would need to pay off to bring the first mortgage to 80% or 78% LTV.
LTV Formula and Example
With the default values, LTV = $340,000 ÷ $400,000 × 100 = 85%. With no second loan the CLTV is also 85%, and equity is $400,000 − $340,000 = $60,000.
To reach 80% the first mortgage must fall to 0.80 × $400,000 = $320,000, which means paying down $20,000. Reaching 78% means a balance of $312,000, or $28,000 of principal. If you also took a $40,000 home equity line, the first-mortgage LTV would stay at 85% but the CLTV would rise to ($340,000 + $40,000) ÷ $400,000 = 95%.
LTV = first loan ÷ property value × 100 · CLTV = (first loan + second loans) ÷ property value × 100
- first loan
- balance of the first mortgage, or the amount you plan to borrow
- second loans
- balances of any home equity loan, HELOC or other loan secured by the same property
- property value
- appraised value, or for a purchase the lower of the appraised value and the price
Some lenders also quote HCLTV, which counts the full credit limit of a HELOC rather than the amount drawn.
What Your LTV Means for PMI and Approval
On a conventional mortgage, lenders usually require private mortgage insurance (PMI) when you put down less than 20%, that is, when LTV is above 80%. PMI protects the lender, not you, and adds a monthly cost until it is removed.
The Homeowners Protection Act gives borrowers with conventional loans the right to request PMI cancellation when the principal balance is scheduled to reach 80% of the home's original value, and requires the servicer to end it automatically at 78%, provided payments are current. Government-backed loans follow their own rules: FHA loans charge a mortgage insurance premium regardless of LTV, and VA loans have no monthly mortgage insurance.
- 80% or less: typically no PMI and the best conventional pricing.
- 80% to 95%: conventional loans available with PMI; the premium rises with LTV.
- Up to 97%: possible on some conventional first-time buyer programs; FHA allows 96.5% with a 3.5% down payment.
- Above 100%: the home is worth less than you owe, which usually rules out a standard refinance or new home equity borrowing.
Ways to Lower Your LTV
LTV falls when the loan shrinks or the value rises. A larger down payment is the most direct lever on a purchase. On an existing loan, every scheduled payment lowers the balance, and extra principal payments speed that up; the pay-down figures above show how far you are from the 80% and 78% thresholds.
Rising home prices also lower LTV, but servicers base PMI cancellation on the original value unless you request removal based on a new appraisal and meet the lender's conditions. Before relying on appreciation, ask your servicer what it requires.
Frequently asked questions
What is a good loan-to-value ratio?
For a conventional mortgage, 80% or lower is the common target because it avoids PMI and qualifies for better pricing. Many home equity lenders cap combined LTV at around 80% to 90%.
What is the difference between LTV and CLTV?
LTV counts only the first mortgage. Combined LTV adds every loan secured by the property, such as a second mortgage or HELOC balance, and is what lenders check before approving more borrowing against the home.
When does PMI come off my loan?
You can ask your servicer to cancel PMI once your balance is scheduled to reach 80% of the original value, and it must end automatically at 78% if you are current on payments. Some lenders also allow removal earlier based on a new appraisal.
Which value do lenders use, the price or the appraisal?
For a purchase, lenders generally use the lower of the contract price and the appraised value. For a refinance, they use the current appraisal.
Can my LTV be over 100%?
Yes, if the home's value drops below what you owe. This is called being underwater or having negative equity, and it makes refinancing or selling without bringing cash to closing difficult.
Results are estimates for educational purposes and are not financial, tax or legal advice. Confirm figures with a qualified professional or your lender.
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