LTV = loan ÷ value. Above 80% usually triggers PMI on conventional loans.
Calculation details
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What does this calculator estimate?
Loan-to-value (LTV) measures your mortgage as a percentage of the property's value — the key number lenders use to judge risk and whether you need PMI. Enter the loan amount and property value to get the LTV.
- LTV = loan ÷ value × 100
- 80% LTV is the common PMI-free threshold
- Lower LTV = less lender risk, better terms
Why LTV matters
LTV is the lender's risk measure: the share of the property financed by the loan. Lower LTV means more equity and better terms. Crossing below 80% LTV eliminates PMI, and lower LTVs qualify for the best rates.
Limitations to watch for
LTV uses the current value — which rises with appreciation. Combined LTV (CLTV) adds all liens. The tool assumes the loan is a first mortgage.
How to use it in practice
Use LTV to know if you can drop PMI (below 80%), to plan refinancing, and to compare loan offers. Lenders price rates by LTV tiers — a 75% loan rates better than 90%.
['Enter the loan amount.', 'Enter the property value.', 'Read the LTV and equity percentage.']
What LTV measures
Loan-to-value is the loan amount divided by the property value: a $240,000 loan on a $300,000 home has an 80 percent LTV. It measures how much equity the borrower has and is the primary risk gauge lenders use for mortgages and home equity products.
Why 80 percent is the magic line
Above 80 percent LTV, lenders typically require private mortgage insurance (PMI) because the borrower's equity cushion is thin. Crossing below 80 percent through payments or appreciation removes PMI and reduces monthly cost. The calculator shows the LTV and flags the PMI threshold.
LTV for refinance and HELOC
Home equity loans and HELOCs cap combined LTV around 80 to 90 percent. The combined figure includes the first mortgage plus the new credit line. Knowing your LTV before applying tells you whether the product is even available at your equity level.
Property value changes move LTV
A $300,000 home that appreciates to $330,000 drops an $240,000 loan's LTV from 80 to 72.7 percent — possibly below the PMI-removal threshold. Market swings work both ways: a decline raises LTV and can trigger margin calls on HELOCs.
A worked example
A $200,000 purchase with $40,000 down has a $160,000 loan and 80 percent LTV. With 10 percent down, the loan is $180,000 and LTV is 90 percent, requiring PMI. The calculator converts any price, down payment, and loan amount into the LTV that lenders will ask about.
How this calculator works
Formula
Loan-to-value = loan amount ÷ property value × 100. It measures how much of the property is financed versus owned.
Worked example
A $240,000 loan on a $300,000 property: LTV = 80% — meaning 20% equity.
Assumptions to verify
- A single first mortgage.
- The value is current market value.
- No other liens are included.
Frequently asked questions
What is LTV?
The loan amount as a percentage of the property value: $240k ÷ $300k = 80%.
How is it calculated?
Loan amount ÷ property value × 100.
Why does LTV matter?
It drives your rate and whether you pay PMI — under 80% usually drops PMI.
What is a good LTV?
80% or below avoids PMI; 60–75% gets the best rates.
How do I remove PMI?
Refinance or request removal once your balance is below 80% of the current value.
What is CLTV?
Combined LTV — includes all liens against the property, used for second mortgages and HELOCs.
Does appreciation lower my LTV?
Yes — as value rises, the ratio falls, which is how most owners reach the 80% threshold.
How do I calculate loan-to-value?
Divide the loan amount by the property value: $240,000 ÷ $300,000 = 80%.
Why does 80% LTV matter?
Above it, lenders usually require PMI; below it, you can avoid or remove it.
Does appreciation change LTV?
Yes — higher value lowers LTV; a decline raises it.
What is combined LTV for a HELOC?
First mortgage plus HELOC balance divided by value — usually capped around 80–90%.
Cite this tool
BoringToolsKit. “Loan-to-Value Calculator.” boringtoolskit.com/loan-to-value-calculator/ (reviewed 2026-08-25). Free to reference in articles, syllabi, and answer posts with a link.
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