Loan to Value (LTV) Calculator
Calculate your loan-to-value ratio to determine equity position and borrowing potential.
LTV Calculation Results
Loan to Value Ratio:
Your Equity: ()
LTV Risk Assessment:
About Our Loan to Value (LTV) Calculator
Disclaimer: This calculator is for informational and educational purposes only. The information provided by this calculator is not financial advice and should not replace professional financial consultation. Individual lender criteria may vary, and actual loan terms will depend on your specific circumstances and lender requirements.
Our Loan to Value (LTV) Calculator helps you determine the relationship between your loan amount and the value of the property you're financing. Understanding your LTV ratio is crucial for homebuyers, homeowners considering refinancing, or anyone looking to tap into their home equity.
What Is Loan to Value (LTV)?
Loan to Value (LTV) is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased. In mortgage lending, the LTV ratio is calculated by dividing the mortgage amount by the appraised property value or purchase price (whichever is less) and expressing the result as a percentage.
The LTV Formula
The formula for calculating Loan to Value is:
LTV = (Loan Amount ÷ Property Value) × 100%
Why LTV Matters
- Mortgage Approval: Higher LTV ratios represent greater risk to lenders and may affect loan approval.
- Interest Rates: Lower LTV ratios often qualify for better interest rates.
- Private Mortgage Insurance (PMI): Typically required when LTV exceeds 80% for conventional loans.
- Refinancing Options: Your LTV affects what refinancing programs you might qualify for.
- Home Equity: LTV helps determine how much equity you have available to borrow against.
Key LTV Thresholds
80% or below: Generally considered a good LTV ratio. Typically doesn't require PMI for conventional loans.
80-95%: Higher risk, may require PMI, and may come with higher interest rates.
95-97%: Maximum LTV for many conventional loan programs, requires strong credit.
Above 97%: Limited loan options, typically restricted to certain government-backed loans.
How to Use Our Calculator:
- Enter your total property value (current market value or purchase price)
- Enter your loan amount (current or proposed)
- Click "Calculate LTV" to see your results
Understanding Your Results:
Our calculator provides you with your LTV ratio, the amount and percentage of equity you have in your property, and a visual risk assessment to help you understand where your LTV falls on the lending risk spectrum.
Common Uses for LTV Calculations
First-Time Home Purchases: Determine how large a down payment you need to achieve a target LTV.
Refinancing: Calculate if you have enough equity to qualify for specific refinancing options.
Home Equity Loans/Lines: Understand how much equity you can potentially access.
PMI Removal: Determine if you've reached the equity threshold to remove PMI from your mortgage.
Investment Analysis: Assess leverage and risk in real estate investments.
Whether you're planning to buy a home, refinance your current mortgage, or tap into your home's equity, our LTV calculator provides a quick and easy way to understand your position and options.
Frequently Asked Questions
Can I get a mortgage with a high LTV ratio?
Yes, though options may be limited. Conventional loans typically max out at 97% LTV, while FHA loans can go up to 96.5% LTV with mortgage insurance. VA loans for qualified veterans may allow up to 100% LTV. However, higher LTVs generally come with higher interest rates and additional costs like mortgage insurance.
How can I lower my LTV ratio?
You can lower your LTV ratio by: 1) Making a larger down payment when purchasing, 2) Paying down your principal balance through regular mortgage payments or extra payments, 3) Making home improvements that increase your property's value, or 4) Waiting for natural market appreciation of your property value. Each of these approaches either decreases the loan amount or increases the property value, resulting in a lower LTV ratio.
Is Combined Loan-to-Value (CLTV) different from LTV?
Yes. While LTV considers only your primary mortgage, CLTV takes into account all loans secured by your property. For example, if you have a first mortgage and a home equity line of credit (HELOC), CLTV would include both loan balances divided by your property value. Lenders often use CLTV when considering second mortgages or home equity products.