Loan-to-Value Calculator

How it works

Loan-to-value, or LTV, is the share of your home's value that you still owe. Lenders lean on it to set your rate and to decide whether you need private mortgage insurance, because a smaller cushion of equity is a bigger risk to them. The math is a single ratio:

With the defaults, a $320,000 loan on a $400,000 home is an 80% LTV, which leaves $80,000, or 20%, in equity. Eighty percent is the line that matters: at or below it, most lenders drop PMI, so it is the number worth aiming under whether you are buying or refinancing.

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A worked example: $320,000 owed on a $400,000 home

A homeowner who owes $320,000 on a house now worth $400,000 wants to know where they stand with the bank. Divide the loan by the value and the loan-to-value ratio comes out to 80%, right at the line lenders care about most.

That 80% is the threshold where things get easier. At or below it, most lenders drop private mortgage insurance, which quietly saves you a monthly premium. It also means you already hold $80,000 in equity, the slice of the home that is yours rather than the bank's.

The ratio moves two ways: pay down the loan and it falls, or watch the home's value climb and it falls again. Either path builds equity. Put in your own balance and home value to see which side of 80% you land on.

Getting under 80%

• Put more down at purchase. A 20% down payment starts you at exactly 80% LTV and skips PMI from day one. It is the cleanest way across the line.
• Pay the balance down. Every extra dollar of principal lowers the top of the ratio, and once you reach 80% you can usually ask the lender to cancel PMI.
• Let the value rise. Appreciation lifts the bottom of the ratio for free. A reappraisal after a few strong years can push you under 80% without paying a cent extra.

How lenders price your LTV

Lenders don’t treat LTV as a simple pass or fail. They price it in tiers, and each step down the ladder tends to unlock a better deal, because a bigger equity cushion means less of their money is at risk if the loan ever goes bad. Knowing which band you fall into tells you what to expect before you apply, and it’s worth reaching for the next band down whenever a little more cash gets you there.

• At or below 80%. The sweet spot. No private mortgage insurance on a conventional loan, and you qualify for the lender’s best rate tier.
• 80% to 95%. Approval is routine, but you’ll carry PMI and often a slightly higher rate until you build the balance back under 80%.
• 95% to 97%. Still available on many conventional and first-time-buyer programs, with the most PMI and the tightest credit and income checks.
• Above 97%. Usually means a government-backed loan such as FHA or VA, which swap PMI for their own upfront and annual insurance or funding fees.

Where LTV follows you after closing

LTV isn’t only a purchase-day number. Lenders recheck it any time you borrow against the house again, so it keeps shaping your options for as long as you own the place. Watching it lets you time the moves that depend on it.

• Refinancing. A lower LTV earns a better rate, and crossing under 80% is often the entire reason to refinance, since it clears PMI at the same time.
• Cash-out refinancing. Pulling equity out pushes your LTV back up, and most lenders cap a cash-out loan near 80%, which limits how much you can actually take.
• Home equity loans and lines. These are judged on combined LTV, stacking the new balance on top of your first mortgage against the same value.
• Canceling PMI. Once your balance reaches 80% of the original value you can request cancellation, rather than waiting for the automatic termination lenders owe you at 78%.

Combined LTV when a second loan stacks

This calculator shows the LTV of a single loan. The moment you add a second mortgage or a home equity line, lenders switch to combined loan-to-value, or CLTV, which adds every balance secured by the home and divides the total by the value.

Say your home is worth $400,000, your first mortgage is $260,000, and you open a $40,000 line of credit. Your first-loan LTV is 65%, but your CLTV is $300,000 against $400,000, or 75%. Lenders lean on the combined figure because it reflects the total claim on the house if it ever sold, and most cap CLTV somewhere between 80% and 90% depending on the program and your credit.

If you’re planning to open a line, run the combined number first: it sets the ceiling on what you can borrow, and it explains why a home with plenty of paper equity can still come up short on a large draw.

When a soft market lifts your LTV

Because the home’s value sits in the denominator, your LTV can climb even if you never borrow another dollar. A dip in local prices shrinks the bottom of the ratio, and the percentage you owe rises on its own.

• Falling values erase equity first. The last dollars of equity you built are the first to vanish when prices slide, which can push a comfortable LTV back over 80%.
• It matters most near a refinance. If you were counting on a low LTV to refinance or drop PMI, a soft market can delay both until values recover.
• Paying down principal is your hedge. You can’t control the market, but extra principal lowers the top of the ratio and offsets part of a price dip.