Real Estate & Credit
LTV Calculator
Work out your loan-to-value ratio and equity share.
LTV Calculator
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How it works
The loan to value ratio divides the mortgage by the property value. A $360,000 loan on a $450,000 home is an 80% LTV, which means you hold 20% equity.
LTV is the main risk dial for lenders: above 80% most conventional loans require mortgage insurance, and above 90-95% lenders expect higher rates because their cushion is thin. Knowing your LTV tells you what refinancing or insurance options you have.
Formula
LTV = Loan amount / Property value
Equity share = 1 − LTV.
Worked example
Example: a $450,000 home with a $360,000 mortgage. LTV = 360000 / 450000 = 80%. You have 20% equity, and the loan clears the 80% threshold that avoids mortgage insurance.
WORKED EXAMPLE — DEFAULT INPUTS
What to know
Equity builds through two channels: paying down the loan and market appreciation. Early in a 30-year mortgage the principal payoff is tiny, so most early equity comes from appreciation; later, the amortization accelerates and equity builds faster.
That is why a home bought at 95% LTV feels different from one at 70%: the first has almost no buffer if prices dip, while the second holds protection against a downturn. LTV is not just a lending number; it is your cushion against market moves.
On a rental property, LTV also sets the leverage you can refinance against. Many lenders cap cash-out refinances at 75-80% LTV, so a property with 30% equity can release a meaningful chunk of it without losing the rental economics.
Check the ratio again after a few years of payments and appreciation; as the LTV falls, refinancing options open and the mortgage insurance premium often disappears with it.
FAQ
What is a good LTV for a mortgage?
80% or lower is the sweet spot: no mortgage insurance and the best rates. 90-95% is common for first-time buyers but costs more each month.
What happens above 80% LTV?
Conventional lenders usually require private mortgage insurance until the LTV drops below 80%, adding a monthly cost you can often remove later.
Can I use LTV for refinancing?
Yes. A cash-out refinance is typically capped at 80% LTV for the new loan, and rates improve as your LTV falls.
Is LTV the same as equity?
Inverse. Equity is value minus loan; LTV is loan divided by value. At 80% LTV your equity is 20%.