BCBetter Calculators

Loan to Value (LTV) Calculator

Calculate your loan-to-value ratio, equity percentage, and whether PMI may be required.

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Enter your values and click Calculate

How It Works

The LTV ratio is calculated as: LTV (%) = (Loan Amount ÷ Property Value) × 100. For example, if you borrow $200,000 on a property worth $250,000, your LTV is (200,000 ÷ 250,000) × 100 = 80%. Equity percentage is simply 100 − LTV. Equity amount is Property Value − Loan Amount. The 80% LTV threshold matters because most conventional loan guidelines require private mortgage insurance (PMI) for LTV ratios above 80%. PMI typically costs 0.5%–1.5% of the loan amount per year, adding to your monthly payment. Once you reach 20% equity (LTV = 80%), you can request PMI cancellation under the Homeowners Protection Act. Lenders are legally required to cancel PMI automatically once LTV reaches 78% based on your original amortization schedule.

Examples

Standard 20% Down Payment
A buyer puts 20% down on a $300,000 home, borrowing $240,000.
Result: LTV = 80%. Equity = 20% ($60,000). No PMI required.
Low Down Payment (5%)
A first-time buyer puts only 5% down on a $250,000 home.
Result: LTV = 95%. Equity = 5% ($12,500). PMI required until LTV drops to 80%.
Refinance Check
A homeowner checking LTV after paying down their mortgage to $150,000 on a home now worth $220,000.
Result: LTV = 68.2%. Equity = 31.8% ($70,000). No PMI required — eligible to remove PMI if still paying it.

Frequently Asked Questions

What is a good LTV ratio?
An LTV of 80% or below is generally considered favorable. It means you have at least 20% equity in the property, which eliminates the need for PMI on most conventional loans and typically qualifies you for better interest rates. An LTV below 60% is considered excellent and may qualify you for the most competitive mortgage rates. Higher LTVs (above 90%) are riskier for lenders and result in stricter loan terms or higher interest rates.
When can I remove PMI?
For conventional loans, you can request PMI cancellation once your LTV reaches 80% based on the original purchase price and original amortization schedule. Your lender is legally required to cancel PMI automatically when your LTV is scheduled to reach 78% — even without a request. If your home has appreciated significantly, you may be able to get a new appraisal and remove PMI earlier, but the lender will set its own requirements for this process.
Does LTV affect my mortgage interest rate?
Yes, significantly. Lenders use LTV as a key risk indicator. Borrowers with lower LTVs represent less risk, so they typically qualify for lower interest rates. Most lenders have 'pricing tiers' at LTV thresholds like 60%, 70%, 75%, and 80% — crossing into a lower tier can meaningfully reduce your rate. A difference of even 0.25% on a 30-year mortgage saves thousands of dollars in interest over the life of the loan.
How does LTV differ from CLTV?
LTV uses only your primary mortgage balance. Combined LTV (CLTV) adds all loans secured by the property — including a home equity loan or HELOC (home equity line of credit). Lenders consider CLTV when you're applying for a second mortgage or refinancing. For example, if your home is worth $300,000, your first mortgage is $200,000, and you want a $30,000 HELOC, your CLTV is ($200,000 + $30,000) ÷ $300,000 = 76.7%. Most lenders cap CLTV at 80%–90%.

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