How to use this calculator
Enter your loan amount directly, or enter the purchase price and down payment to have the loan amount calculated automatically. Then enter the appraised or market value of the property.
The calculator will show your LTV ratio as a percentage, whether PMI is required, your equity amount and percentage, and how much more you would need to pay down to reach the 80% LTV threshold if applicable.
Use the rate comparison table to understand how your LTV tier affects the interest rate you can expect. Lower LTV ratios unlock better pricing from lenders across all loan programs.
Understanding LTV ratios
The Loan-to-Value ratio is one of the most important numbers in mortgage lending. It represents the lender's risk exposure on the property. A lower LTV means more borrower equity and less lender risk, which translates to better terms for you.
Lenders use LTV to determine loan eligibility, interest rates, and whether mortgage insurance is required. The 80% threshold is critical because it is where PMI requirements kick in on conventional loans, adding significant monthly cost.
Your LTV changes over time as you pay down principal and as property values change. Rising home values reduce your LTV even without extra payments, while falling values can push your LTV higher and potentially into negative equity territory.
Frequently asked questions
What is a good LTV ratio for a mortgage?
An LTV of 80% or below is considered ideal because it avoids PMI and qualifies for competitive rates. An LTV of 60% or below typically earns the very best interest rates available. For investment properties, lenders usually require 75% LTV or lower.
How much does PMI cost?
PMI typically costs between 0.5% and 1% of the loan amount per year, paid monthly. On a $300,000 loan, that is roughly $125 to $250 per month. The exact cost depends on your credit score, LTV ratio, and loan type. Higher LTV and lower credit scores mean higher PMI premiums.
What is the difference between LTV and CLTV?
LTV considers only the first mortgage against the property value. Combined LTV (CLTV) includes all liens on the property, such as home equity loans or lines of credit. Lenders look at both ratios when evaluating risk on second mortgages or HELOCs.
Does LTV use purchase price or appraised value?
Lenders use the lower of the purchase price or appraised value when calculating LTV for a purchase. For refinances, they use the current appraised value since there is no purchase price. This protects the lender if the buyer overpays for the property.
When can I get rid of PMI?
You can request PMI cancellation when your LTV reaches 80% based on the original value. Your servicer must automatically cancel PMI when LTV hits 78% through scheduled payments. You can also request early cancellation with a new appraisal showing sufficient appreciation, though lenders may charge for the appraisal.