LTV Calculator: Loan-to-Value Ratio
Enter your property value and loan amount (or down payment) to calculate your loan-to-value ratio. The calculator shows whether you need private mortgage insurance (PMI), how much home equity you have, and how your LTV compares to standard lending thresholds. Switch to Combined LTV mode to include a second mortgage or home equity line of credit.
What is the loan-to-value ratio?
The loan-to-value ratio (LTV) is the percentage of a property's value that is financed by a mortgage. It is calculated by dividing the loan amount by the appraised value (or purchase price, whichever is lower) and multiplying by 100. For example, if you borrow $320,000 to buy a $400,000 home, your LTV is 80%. Lenders use LTV to assess how much risk they are taking on: a higher LTV means you have less equity and the lender has less buffer if you default. LTV is one of the most important factors in mortgage approval, interest rate pricing, and whether you need private mortgage insurance.
How LTV affects your mortgage
An LTV at or below 80% is the target for most conventional borrowers. It eliminates the requirement for private mortgage insurance (PMI) and typically qualifies you for the lowest available interest rates. Between 80% and 90% LTV, PMI is required on conventional loans and rates begin to climb. Above 90% LTV, costs rise further and some loan programs impose stricter requirements. FHA loans allow up to 96.5% LTV but require both an upfront mortgage insurance premium and an annual premium regardless of LTV. VA and USDA loans permit 100% financing for eligible borrowers with no traditional PMI, though funding or guarantee fees apply. Improving your LTV by even a few percentage points can meaningfully reduce your monthly cost.
Combined LTV (CLTV) and home equity
If you have more than one loan secured by the property - a first mortgage plus a home equity loan, home equity line of credit (HELOC), or second mortgage - lenders look at Combined LTV (CLTV). CLTV adds up all balances and divides by the property value. A lender offering a HELOC, for example, will typically cap CLTV at 85% to 90%, meaning the combined balance of your first mortgage and the HELOC cannot exceed that share of the property value. Home equity is simply the property value minus all outstanding mortgage balances: it represents the portion of the home you own outright and can be borrowed against or realized when you sell.
How to lower your LTV
The two main levers are a larger down payment and a lower purchase price. Making a larger down payment directly reduces the loan amount and the resulting LTV. You can also improve LTV over time as property values rise and as you pay down your mortgage balance. Requesting a new appraisal after significant home improvements or in a rising market can sometimes reduce your LTV enough to cancel PMI without making an extra payment. On a conventional loan, you can request PMI cancellation once you reach 80% LTV, and it must be automatically terminated once you reach 78% LTV based on the original amortization schedule.
LTV thresholds by loan type
| Loan Type | Max LTV | PMI / Insurance | Notes |
|---|---|---|---|
| Conventional | 97% | PMI required above 80% LTV | PMI cancels at 80% LTV (78% automatic) |
| FHA | 96.5% | MIP required for life (or 11 yrs if LTV at or below 90%) | 3.5% minimum down payment; upfront MIP of 1.75% |
| VA | 100% | None | Eligible veterans only; funding fee applies |
| USDA | 100% | Guarantee fee (annual) | Rural properties only; income limits apply |
| Jumbo | 80-90% | PMI varies by lender | Stricter underwriting; lender sets max LTV |
Standard maximum LTV ratios and mortgage insurance requirements for US loan programs.
Frequently asked questions
What is a good LTV ratio for a mortgage?
An LTV at or below 80% is considered good by most lenders and avoids PMI on conventional loans. An LTV below 60% is excellent and typically qualifies for the most competitive rates. The higher the LTV, the more risk the lender is taking on, which is reflected in higher rates and insurance costs.
What is the difference between LTV and CLTV?
LTV (loan-to-value) measures a single mortgage relative to the property value. CLTV (combined loan-to-value) adds up all mortgages secured by the property - first mortgage, second mortgage, home equity loans, and HELOCs - and divides the total by the property value. Lenders use CLTV when you apply for additional financing against a property you already have a mortgage on.
Does LTV affect my interest rate?
Yes. Lenders price risk through rate adjustments called loan-level price adjustments (LLPAs). Borrowers with lower LTV ratios typically receive lower interest rates. The improvement can be material: moving from 90% LTV to 80% LTV can reduce your rate by 0.25% to 0.50%, depending on the lender and your credit profile.
When can I stop paying PMI?
On a conventional loan, you can request PMI cancellation once your LTV reaches 80% based on the original home value and the original amortization schedule. Your lender must automatically cancel PMI when you reach 78% LTV under the Homeowners Protection Act. You can also request cancellation based on a new appraisal if your home has appreciated, but lenders vary in their policies on this. FHA MIP works differently: it remains for the life of the loan if your original LTV was above 90%, and for 11 years if it was 90% or below.
What LTV is needed for a home equity loan or HELOC?
Most lenders allow combined LTV (CLTV) up to 85% or 90% for home equity products. If your home is worth $400,000 and you have an $280,000 first mortgage (70% LTV), a lender allowing 85% CLTV would let you borrow up to $60,000 through a home equity loan or HELOC ($340,000 total / $400,000 value = 85%).