What this calculator does
Loan-to-value is the loan amount expressed as a percentage of the property's value. It is the first number a lender looks at when sizing risk on a mortgage or refinance, because it shows how much of a cushion exists between what is owed and what the property is actually worth.
A lower LTV means more equity sits between the loan and the property's value, which is why it usually comes with better interest rates and easier approval. A higher LTV, closer to or above 80%, often triggers requirements such as mortgage insurance or a higher rate, since a small drop in property value would leave the lender with less protection.
The formula
Divide the loan amount by the property's value (appraised value for a refinance, or purchase price for a new loan) and express the result as a percentage.
| Term | Meaning |
|---|---|
| LTV | Loan-to-value: (loan amount ÷ property value) × 100. |
| Loan amount | The amount being borrowed against the property. |
| Property value | The appraised value, or the purchase price for a new purchase loan. |
The inputs explained
| Field | What to enter |
|---|---|
| Loan amount ($) | The loan amount, either the amount being requested or the current outstanding balance for a refinance. |
| Property value (appraised or purchase price) ($) | The property's value: the purchase price for a new loan, or the appraised value for a refinance. |
When to use it
Sizing a mortgage before applying
Checking LTV against a lender's maximum threshold before applying shows whether a larger down payment is needed, or whether mortgage insurance is likely to apply.
Deciding whether to refinance
A property that has gained value, or a loan that has been paid down, can put LTV below a threshold that unlocks better refinance terms or removes a mortgage insurance requirement.
Comparing loan offers
Two lenders quoting different rates for the same loan amount and property are often pricing in a different view of LTV risk, or applying it against a different valuation.
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
How LTV changes with property value at a fixed loan amount
A fixed $320,000 loan, against a range of property values.
| Property value | Loan-to-value | Implied equity / down payment |
|---|---|---|
| $320,000 | 100.0% | $0.00 |
| $355,000 | 90.1% | $35,000.00 |
| $400,000 | 80.0% | $80,000.00 |
| $450,000 | 71.1% | $130,000.00 |
| $533,000 | 60.0% | $213,000.00 |
| $640,000 | 50.0% | $320,000.00 |
How LTV changes with loan amount at a fixed property value
A fixed $400,000 property, against a range of loan amounts.
| Loan amount | Loan-to-value | Implied equity / down payment |
|---|---|---|
| $200,000 | 50.0% | $200,000.00 |
| $280,000 | 70.0% | $120,000.00 |
| $320,000 | 80.0% | $80,000.00 |
| $360,000 | 90.0% | $40,000.00 |
| $380,000 | 95.0% | $20,000.00 |
| $400,000 | 100.0% | $0.00 |
Questions
What LTV do lenders typically want to see?
Requirements vary by lender, loan type and jurisdiction, so there is no single figure that applies everywhere. Many conventional loans treat 80% as a common threshold above which mortgage insurance is required, but this varies by programme.
How is LTV different from combined loan-to-value (CLTV)?
LTV considers a single loan against the property value. CLTV adds together every loan secured against the property, such as a first mortgage plus a home equity line, before dividing by the property value.
Does a lower LTV always mean a better deal?
It generally means lower risk to the lender, which often but not always translates into a better rate. It also means more of the buyer's own money is tied up in the property rather than earning a return elsewhere.
How can I lower my LTV?
Increase the down payment, pay down the loan balance faster, or wait for the property's value to rise; any of the three narrows the gap between what is owed and what the property is worth.
To check whether a rental property's income supports the loan being sized here, see the debt yield ratio calculator.