Loan-to-Value Calculator

Loan-to-value ratio (LTV) is the loan amount divided by the property's value, expressed as a percentage: LTV = Loan Amount ÷ Property Value. A $320,000 loan against a $400,000 home is an 80% LTV, meaning the borrower has 20% equity and the lender has 80% of the value at risk. The same formula rearranges to Loan = Value × LTV when you want to know how much you can borrow, and Down Payment = Value × (1 − LTV) when you want to know what you must bring to closing.

The value in the denominator is not the number you pick. On a purchase, lenders use the lower of the contract price or the appraised value. If you agree to pay $410,000 and the appraisal comes in at $400,000, the lender computes LTV on $400,000, and the $10,000 gap becomes additional cash out of your pocket. On a refinance, LTV uses the appraised value alone, which is why homeowners in appreciating markets can refinance out of mortgage insurance without paying anything down.

When a property carries more than one lien, lenders also compute combined loan-to-value (CLTV): all mortgage balances divided by value. A $320,000 first plus a $40,000 home equity line on a $400,000 home is an 80% LTV but a 90% CLTV. Approval decisions on second mortgages, HELOCs, and cash-out refinances hinge on CLTV, not the first-lien LTV, and this calculator reports both.

LTV moves in two directions over time without anyone doing anything. Amortization reduces the numerator every month as principal is paid down, and market appreciation raises the denominator. A loan that started at 95% LTV can reach 80% in three or four years in a healthy market, which is the mechanism behind most mortgage insurance cancellations.

A buyer is purchasing a $400,000 house with $80,000 down. The loan is $320,000, so LTV is 320,000 ÷ 400,000 = 80.0%. At exactly 80% the buyer avoids private mortgage insurance on a conventional loan and typically receives the best available rate tier on that product.

Suppose instead the buyer only has $40,000. The loan becomes $360,000 and LTV is 90.0%. Two things change: PMI is now required, commonly costing between 0.30% and 1.15% of the loan balance annually depending on credit score and LTV, and the interest rate may carry a small loan-level pricing adjustment. On $360,000, PMI at 0.50% is $150 a month, roughly $1,800 a year, until the balance amortizes down.

Now add a piggyback structure. The buyer takes a $320,000 first at 80% LTV plus a $40,000 second lien, contributing $40,000 in cash. First-lien LTV is 80%, so no PMI applies, but CLTV is 90%. The second lien carries a higher rate, and the total monthly cost may or may not beat the PMI route. Running both is worth ten minutes before closing.

Three years later the home appraises at $460,000 and the first-lien balance has amortized to $305,000. LTV is now 305,000 ÷ 460,000 = 66.3%. That opens the door to a rate-and-term refinance without mortgage insurance, or a cash-out refinance up to the lender's cash-out limit, commonly 80% LTV, which would be a $368,000 loan and roughly $63,000 of cash before costs.

Every loan program publishes a maximum LTV, and those ceilings are the practical answer to how much you need to put down. The figures below reflect standard United States programs in the mid-2020s; individual lenders may impose stricter overlays.

Conventional conforming purchase: up to 97% LTV for qualifying first-time buyers, 95% commonly. PMI is required above 80% and, under the Homeowners Protection Act, must be cancelled automatically at 78% LTV based on the original amortization schedule for most loans.

FHA: up to 96.5% LTV with a 580 credit score. FHA charges both an upfront mortgage insurance premium and an annual premium, and on most loans originated above 90% LTV the annual premium lasts for the life of the loan rather than cancelling at 78%.

VA: up to 100% LTV for eligible veterans and service members, with no monthly mortgage insurance, though a one-time funding fee usually applies.

USDA rural development: up to 100% LTV within eligible geographies and income limits.

Cash-out refinance, conventional: generally capped at 80% LTV on a primary residence and 75% on an investment property.

Investment property purchase: typically 75% to 85% LTV, with pricing improving meaningfully at 75% and below.

Commercial real estate: 65% to 75% LTV is the normal range, and the loan is usually further limited by DSCR and debt yield tests. In commercial lending LTV is rarely the binding constraint; income coverage usually is.

Jumbo loans: 80% to 89.99% LTV depending on the lender, credit profile, and reserves.

Rate pricing is tiered by LTV. On conventional loans, loan-level price adjustments step at 60%, 70%, 75%, 80%, 85%, 90%, and 95%. Moving from 80.5% to 80.0% by bringing an extra few thousand dollars to closing can be worth an eighth of a point in rate for thirty years, plus the elimination of mortgage insurance. Always ask a lender what the next better pricing tier is and what it would cost to reach it.

Mortgage insurance is the largest single cliff. Above 80% LTV on a conventional loan, PMI is mandatory. Its cost rises steeply with LTV and falls with credit score. Borrowers can request cancellation at 80% LTV based on the original schedule, and servicers must terminate automatically at 78%, but reaching those thresholds early through appreciation requires a new appraisal and a servicer that permits value-based cancellation.

Approval probability itself is LTV-sensitive. High-LTV files receive tighter scrutiny of reserves, debt-to-income, and appraisal quality, because the lender has less cushion if the borrower defaults or values fall. Manual underwriting exceptions are far easier to obtain at 70% LTV than at 95%.

On the other side, an unnecessarily low LTV has a real cost. Every extra dollar of down payment is a dollar that is not invested elsewhere, and home equity is illiquid and expensive to extract. The right LTV balances the pricing benefit against the opportunity cost of the equity, and for many buyers the optimum sits exactly at the 80% no-PMI threshold rather than as low as possible.

Computing LTV on the purchase price when the appraisal is lower. Lenders always use the lesser of price or appraised value on a purchase. A low appraisal raises your LTV and either requires more cash or a renegotiated price.

Forgetting the second lien. A HELOC you opened three years ago and have not drawn on still counts in CLTV at its full line amount with many lenders, not just the drawn balance.

Assuming PMI drops off automatically at 80%. Automatic termination is at 78% of the original value on the original amortization schedule. Cancellation at 80% requires you to request it, and value-based cancellation requires an appraisal.

Rolling closing costs into the loan without recomputing LTV. Financing $8,000 of costs on a $400,000 home moves an 80.0% LTV to 82.0% and triggers mortgage insurance.

Using an online value estimate for a refinance. Automated valuation models can differ from an appraisal by 10% in either direction. Do not commit to an LTV-dependent decision before the appraisal is in.

Ignoring how LTV behaves in a falling market. A 95% LTV loan becomes an underwater loan after a 6% price decline, which eliminates the ability to sell or refinance without bringing cash. Higher LTV is not merely more expensive, it is less flexible.