Loan-to-Value (LTV) Ratio Calculator
Calculate your loan-to-value ratio from the loan amount and property value — the number that drives mortgage rates and PMI.
How it works
LTV = loan amount ÷ property value × 100 · Equity = property value − loan amount
Loan-to-value ratio measures how much of an asset's value is financed by debt. Lenders treat it as a core risk gauge: the more equity you hold (the lower the LTV), the less they can lose if they have to foreclose, so lower LTVs win better rates. The 80% threshold matters most on mortgages — cross below it and a conventional lender typically drops private mortgage insurance, saving you a recurring premium.
Worked example
Borrowing $240,000 against a $300,000 home gives an LTV of 240,000 ÷ 300,000 = 80%, with $60,000 of equity. At exactly 80%, a conventional loan usually avoids PMI; a $255,000 loan would be an 85% LTV and generally require it.
Frequently asked questions
Why does 80% LTV matter?
On a conventional mortgage, an LTV above 80% usually triggers private mortgage insurance (PMI), an extra monthly premium that protects the lender. Reaching 80% — through payments or rising home value — lets you request PMI removal, and it drops automatically at 78%.
What LTV do I need to refinance?
Most conventional refinances want an LTV of 80% or lower to avoid PMI and get the best rate, though some programs allow higher. A cash-out refinance typically caps LTV around 80% as well, since it increases the loan against your equity.
Is LTV only for mortgages?
No. Auto loans, home equity lines and other secured lending all use LTV against the collateral's value. A lower LTV signals less risk and generally earns a better rate on any secured loan.
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Educational estimate, not financial advice. Actual loan terms, fees and interest depend on your lender and credit profile.