Loan-to-Value (LTV) Ratio Calculator
Calculate your loan-to-value (LTV) ratio and understand how it affects mortgage rates, PMI, and refinancing options.
How to use this tool
- Enter mortgage balance and property value in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your ltv ratio and the full breakdown beneath it.
LTV is one of the most important numbers in real estate lending. It determines your interest rate, PMI requirement, and ability to refinance or take out a home equity loan.
Formula
LTV (%) = (Mortgage Balance ÷ Property Value) × 100
Equity % = 100 − LTV
Equity Amount ($) = Property Value − Mortgage Balance
How it works
The Loan-to-Value (LTV) ratio is calculated by dividing the current outstanding mortgage balance by the current appraised or estimated property value, expressed as a percentage. The equity percentage is the complement (100 minus LTV), and the dollar equity is simply the property value minus the loan balance.
LTV affects mortgage rate pricing, PMI requirements, and eligibility for cash-out refinancing. This calculator uses the values you enter; lenders use a formal appraisal for any lending decision, so results here are estimates based on your own property value assumption.
Worked example
Worked example
- Mortgage balance: $220,000 | Property value: $300,000
- LTV = ($220,000 ÷ $300,000) × 100 = 73.33%
- Equity % = 100 − 73.33 = 26.67%
- Equity amount = $300,000 − $220,000 = $80,000
LTV: 73.33% | Equity %: 26.67% | Equity amount: $80,000
Key terms
- Loan-to-Value (LTV) ratio
- The outstanding loan balance divided by the property's appraised value, expressed as a percentage; a key metric lenders use to assess risk.
- Home equity
- The portion of the property's value that the owner actually owns outright, equal to the property value minus all outstanding mortgage balances.
- Combined LTV (CLTV)
- The ratio of all liens (first mortgage plus any HELOCs or second mortgages) to the property value; relevant when multiple loans are secured against the same property.
- 80% LTV threshold
- The LTV at which conventional lenders typically eliminate PMI requirements and may offer better interest rates.
- Cash-out refinance
- A new mortgage for more than the existing loan balance, allowing the homeowner to extract equity as cash; lenders typically cap cash-out refis at 80% LTV.
Frequently asked questions
- What LTV do lenders prefer?
- Most conventional lenders prefer LTV of 80% or lower (20%+ equity). Above 80% typically requires PMI. Above 97% LTV limits your loan options. For refinancing, 80% LTV or below gives the best rates.
- How does LTV affect mortgage rates?
- Lower LTV means lower risk for the lender, which typically translates to a lower interest rate. Each 5% improvement in LTV can reduce your rate by 0.125–0.25%, depending on the lender and market conditions.