LTV Calculator — Loan to Value
Calculate your loan-to-value (LTV) ratio for mortgage qualification, refinancing, and home equity loans. LTV ratio is a key factor lenders use to assess risk and determine loan terms.
LTV Calculations
Loan Details
Qualification Status
LTV Ratio Guidelines by Loan Type
| Loan Type | Maximum LTV | PMI Required | Typical Rates |
|---|---|---|---|
| Conventional Purchase | 97% | LTV > 80% | 6.5-7.5% |
| FHA Purchase | 96.5% | Always | 6.0-7.0% |
| VA Purchase | 100% | No | 6.0-7.0% |
| USDA Purchase | 100% | No | 6.0-7.0% |
| Conventional Refinance | 97% | LTV > 80% | 6.5-7.5% |
| Home Equity Loan | 90% | No | 7.5-9.5% |
Understanding Loan-to-Value (LTV) Ratio
The loan-to-value (LTV) ratio is a critical factor in mortgage lending that compares the amount of your loan to the appraised value of the property. Lenders use LTV to assess risk and determine loan terms, interest rates, and whether private mortgage insurance (PMI) is required.
How LTV is Calculated
LTV Ratio = (Loan Amount ÷ Property Value) × 100. For example, a $320,000 loan on a $400,000 home has an LTV of 80%.
Types of LTV Ratios
- Initial LTV: Loan amount divided by purchase price or appraised value
- Combined LTV (CLTV): All loans divided by property value (for multiple liens)
- Home Equity LTV: Second mortgage amount divided by property value
- Current LTV: Remaining loan balance divided by current property value
LTV Impact on Mortgages
Lower LTV Benefits
- Better interest rates
- No PMI required (LTV = 80%)
- Easier qualification
- Lower monthly payments
- More negotiating power
Higher LTV Challenges
- Higher interest rates
- PMI required
- More difficult qualification
- Limited loan options
- Higher closing costs
PMI Requirements by LTV
- LTV = 80%: No PMI required for conventional loans
- LTV 80.01% - 85%: PMI required, can be canceled at 78% LTV
- LTV 85.01% - 90%: PMI required, can be canceled at 75% LTV
- LTV > 90%: PMI required, lender-paid option may be available
- FHA Loans: Always require mortgage insurance regardless of LTV
Improving Your LTV Ratio
- Make Larger Down Payment: Reduces loan amount relative to property value
- Choose Less Expensive Home: Lower purchase price improves LTV
- Pay Down Existing Mortgage: Reduces loan balance before refinance
- Wait for Property Appreciation: Increases property value over time
- Make Home Improvements: Can increase appraised value
Tip: Lower LTV ratios generally result in better loan terms and lower costs. Aim for an LTV of 80% or less to avoid PMI and get the best available rates. Your real estate agent or lender can help you understand how different scenarios affect your LTV.