Loan-to-Value (LTV) Calculator
Calculate loan-to-value ratio LTV = loan / property value.
See PMI thresholds, conventional vs FHA limits, and the mortgage tier you qualify for.
What the loan-to-value ratio tells you
The loan-to-value ratio compares your mortgage amount to the property’s appraised value:
LTV = (Loan amount / Property value) × 100
It is the single most important number lenders use to price your mortgage and decide whether to require Private Mortgage Insurance (PMI). A higher LTV means the lender is financing more of the property and bears more risk if you default, so they charge accordingly: higher interest rate, mandatory PMI, or outright rejection.
The 80 percent threshold
The whole US mortgage system pivots around LTV = 80 percent. Below it (down payment of 20 percent or more), you get the best interest rates and no PMI requirement on conventional loans. Above it, you pay PMI until your balance drops to 80 percent of original value (or 78 percent automatically by law, under the Homeowners Protection Act of 1998).
The 80 percent number is not arbitrary. Statistical models of mortgage defaults show that loans with 20 percent equity have dramatically lower default rates than loans with less equity, because borrowers with substantial down payments are less likely to walk away when housing prices dip. The 20 percent equity buffer also protects the lender from price declines: if your home loses 10 percent of value, you still have 10 percent equity, and the lender is fully covered.
Loan-type limits
Different mortgage programs have different maximum LTVs:
| Loan type | Maximum LTV | Notes |
|---|---|---|
| Conventional (Fannie Mae / Freddie Mac) | 97 percent | First-time buyer programs; PMI required above 80 percent |
| Jumbo (above conforming limit) | 80 to 90 percent | Varies by lender; tighter standards |
| FHA (Federal Housing Administration) | 96.5 percent | Requires 3.5 percent down minimum |
| VA (Veterans Affairs) | 100 percent | No down payment required for eligible veterans |
| USDA (Rural Development) | 100 percent | Income limits, rural areas only |
| HELOC / second mortgage | 80 to 90 percent combined LTV | Combines first and second loan |
| Cash-out refinance | 80 percent | Stricter than purchase or rate-term refinance |
If your LTV is above 80 percent, you have several options: pay PMI on a conventional loan, use an FHA loan (lower down payment but lifetime MIP for most modern FHA loans), get a VA or USDA loan if eligible, or do a piggyback structure (80/10/10) where you take an 80 percent first mortgage plus a 10 percent second mortgage and put 10 percent down.
PMI cost at different LTVs
Private Mortgage Insurance costs depend on your credit score and LTV:
| LTV range | Typical annual PMI rate | On a $300,000 loan, monthly cost |
|---|---|---|
| 80 to 85 percent | 0.20 to 0.50 percent | $50 to $125 |
| 85 to 90 percent | 0.40 to 0.80 percent | $100 to $200 |
| 90 to 95 percent | 0.60 to 1.10 percent | $150 to $275 |
| 95 to 97 percent | 0.90 to 1.50 percent | $225 to $375 |
PMI ranges from a few dollars to a few hundred per month. It pays the lender, not you, and provides no benefit beyond letting you buy with less than 20 percent down. The cheapest path is to put 20 percent down if you can, but waiting years to save that amount while housing prices rise is often a worse choice than paying PMI for 2 to 5 years and then refinancing or paying down to drop it.
Refinance LTV is different
If you refinance, the LTV calculation uses the current appraised value, not the original purchase price. If your home has appreciated significantly, your LTV may have dropped substantially even without paying down principal. For example, you bought at 400k with a 320k loan (80 percent LTV) and the home is now worth 500k after five years of appreciation. Your remaining loan balance is around 295k, so your current LTV is 295/500 = 59 percent. This opens up cash-out refinance options or no-PMI conventional refinancing.
Combined LTV (CLTV) for second mortgages
If you have both a first mortgage and a HELOC or second mortgage, lenders look at combined LTV: (first loan + second loan) / property value. For HELOCs, CLTV limits are typically 80 to 90 percent. A high CLTV (say 95 percent) is risky because the second-lien holder is wiped out before the first-lien holder in a foreclosure, so secondary lenders charge more.
Auto loans and other LTV
The same concept applies to auto loans and other secured lending. Auto LTVs commonly run 100 to 125 percent (you can borrow more than the car is worth if you finance taxes and fees), which is one reason auto loans default at much higher rates than mortgages. For auto loans, LTV above 100 percent is called “upside down” and is the source of negative equity rolled into the next car loan, which creates problems when the borrower wants to sell or trade in.
What this calculator does
Enter the loan amount and property value. The calculator returns your LTV percentage, your equity percentage, your risk tier (which mortgage products you qualify for), and whether PMI will be required at this LTV. The visualization shows your loan portion versus equity portion of the property value.