Loan-to-Value (LTV) Calculator
Loans & MortgagesYour equity and whether PMI applies.
Loan & property value
Enter a property value to see your loan-to-value ratio.
Advanced — second lien, cash-out & target
Enter a property value to see your loan-to-value ratio.
How this is calculated
- 1Divide the loan by the property value: $0 ÷ $0 × 100 = 0.0%.
- 2The mirror image is your stake: equity = value − all liens = $0 − $0 = $0, or 0.0% of the value.
- 3Your 0.0% is at or below the 80% line, so PMI is typically not required.
- 4To reach your 1% target the most you can owe is $0 × 1% = $0, leaving $0 of borrowing headroom before you'd hit it.
- 5A cash-out refinance is capped near 80% LTV: $0 × 80% − $0 = $0 of cash-out room today.
Formulas
| Metric | Formula | Your value |
|---|---|---|
| Loan-to-value ratio | loan ÷ value × 100 | 0.0% |
| Your equity | value − all liens | $0 |
| Combined LTV | (loan + second lien) ÷ value × 100 | 0.0% |
| Max loan at target | value × target LTV | $0 |
| Down for target | value − (value × target LTV) | $0 |
| Max cash-out | value × 80% − loan | $0 |
Your inputs
| Input | What it means | Your value |
|---|---|---|
| Property value | The home's current market value — the denominator of every ratio. | $0 |
| Loan amount | The first-lien balance measured against the value. | $0 |
| Target LTV | The ratio you're planning toward; drives the max loan and required down. | 0% |
Know what this estimate is based on
- Jurisdiction
- General model; U.S.-specific rules are identified on the relevant tool
- Scope and limitations
- Educational estimate only. A lender may use different compounding, day-count, eligibility, tax, insurance, escrow, fee, or rounding rules.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter the property's current market value, then the first-mortgage balance you owe or plan to borrow against it.
- 02
Open Advanced to add a second mortgage or HELOC for the combined LTV, a cash-out amount, and the target LTV you're planning toward.
- 03
Read your loan-to-value ratio, equity and risk badge, then use the threshold, down-payment and refinance tables to plan your next move.
Formula
Loan-to-value is the first-mortgage balance expressed as a percentage of the property's worth: LTV = loan ÷ value × 100. With the defaults that is 4,250,000 ÷ 5,000,000 × 100 = 85.0%. Its mirror image is your equity: equity = value − all liens = 5,000,000 − 4,250,000 = 750,000, an equity share of 100 − 85.0 = 15.0%. The 80% line is the one that matters most — at or below it private mortgage insurance is generally not required, while 85.0% sits above it, so PMI typically applies. The target-LTV planner works backwards from a goal you set (default 80%): the largest loan that meets it is value × target = 5,000,000 × 80% = 4,000,000, so a purchase would need a down payment of 5,000,000 − 4,000,000 = 1,000,000 (20%), and from today's 4,250,000 balance you would pay down 250,000 to get there. Add a second mortgage or HELOC and the tool also reports combined loan-to-value, CLTV = (loan + second lien) ÷ value × 100; a 500,000 HELOC would lift the default to 4,750,000 ÷ 5,000,000 = 95.0%. A cash-out refinance is read against the conventional 80% cash-out cap: the most you could free is value × 80% − loan = 4,000,000 − 4,250,000, which is below zero here, so there is no cash-out room until the balance falls under 4,000,000. The tool also stress-tests the value: a 10% drop to 4,500,000 lifts LTV to 4,250,000 ÷ 4,500,000 = 94.4%, while a 10% rise to 5,500,000 cuts it to 77.3% — back under the PMI line without paying a cent.
Example
Start with the defaults: a property value of 5,000,000 and a first-mortgage balance of 4,250,000. Divide the loan by the value and multiply by 100: 4,250,000 ÷ 5,000,000 = 0.85, so the loan-to-value ratio is 85.0%. The other side of that coin is your stake in the home: equity is the value minus everything secured against it, 5,000,000 − 4,250,000 = 750,000, which as a share of the property is 100 − 85.0 = 15.0%. Because 85.0% sits above the 80% line, you hold under 20% equity, so private mortgage insurance typically applies. Now set a target. Aiming for an 80% LTV, the most you could owe is 5,000,000 × 80% = 4,000,000, so you would pay down 4,250,000 − 4,000,000 = 250,000 to reach it and shed PMI — or, on a fresh purchase, put 1,000,000 (20%) down to start there. The down-payment table makes the pattern plain: 15% down lands you at today's 85.0%, while 20% down (1,000,000) drops you to exactly 80.0% and clears the PMI line. Suppose you also hold a 500,000 HELOC: your first-lien LTV is still 85.0%, but your combined LTV climbs to 4,750,000 ÷ 5,000,000 = 95.0%, deep into high-LTV territory where lenders tighten. Finally, test the market. A 10% fall in value to 4,500,000 would push the same 4,250,000 loan to 94.4%, while a 10% rise to 5,500,000 would pull it down to 77.3% — slipping back under the 80% PMI threshold without you paying anything. That sensitivity in both directions is exactly why LTV is a moving target rather than a figure fixed at closing.
Definitions
- Property value
- The home's current market value or appraised worth — the denominator every ratio is measured against (1 to 50,000,000).
- Loan amount
- The first-mortgage balance owed against the property — the numerator of the headline loan-to-value ratio (0 to 50,000,000).
- Loan-to-value ratio
- The headline result: loan ÷ value × 100, the share of the home financed by debt rather than by your own equity.
- Equity
- The slice of the property you own outright: value minus every loan secured against it. Turns negative when you owe more than the home is worth.
- Combined LTV (CLTV)
- Every loan secured by the home — first mortgage plus any second mortgage or HELOC — divided by the value; the figure lenders cap when you stack debt.
- Target LTV
- The ratio you are planning toward; the tool back-solves the maximum loan, the required down payment and the paydown needed to reach it.
- Private mortgage insurance (PMI)
- Insurance a lender requires above 80% LTV that protects the lender, not you, and is paid until your equity passes 20%.
- Cash-out refinance
- Replacing your loan with a larger one and taking the difference in cash, which deliberately raises your LTV and is typically capped near 80%.
Good to know
What loan-to-value actually measures and why lenders fixate on it
Loan-to-value is a single ratio that captures how much of a property is financed by borrowed money versus how much you genuinely own. It is calculated by dividing the loan balance by the property's value and expressing the result as a percentage, so the default figures of a 4,250,000 loan against a 5,000,000 value produce an 85.0% LTV. The remaining 15.0% — 750,000 — is your equity, the slice of the home that is yours outright. To a lender, this ratio is the clearest summary of how exposed they would be if everything went wrong. If a borrower stops paying and the lender has to foreclose and sell, the sale rarely recovers the full market value after costs and a possibly soft market. The equity portion is the buffer that absorbs that shortfall before the lender's own money is at risk. A 15% cushion is thin; a 40% cushion is comfortable. That is why LTV influences almost every term of a mortgage — whether the loan is approved at all, the interest rate attached to it, whether mortgage insurance is required, and how much you can borrow against the property in future. It is also why LTV is not a number you calculate once and forget. It shifts every month as you pay down principal, and it shifts with the market as the property's value rises or falls. Treating it as a live gauge of your position, rather than a figure frozen at closing, is the habit that separates borrowers who manage their equity deliberately from those who are surprised by it. This calculator gives you that gauge: feed in your current balance and a current value and read where you stand today, then use the target planner and the threshold and down-payment tables to see exactly what would move you to a safer band.
The 80% threshold and the cost of private mortgage insurance
The most consequential line on the LTV scale is 80%. At or below it, you hold at least 20% equity, and lenders generally consider the loan safe enough not to require private mortgage insurance. Cross above 80% — as the default 85.0% does — and most conventional lenders add PMI, an insurance policy that protects the lender, not you, against the higher chance of a loss on a thinly cushioned loan. The premium is paid by the borrower, typically folded into the monthly mortgage payment, and it buys you nothing except access to the loan with a smaller down payment. PMI is not a trivial add-on; on a large balance it can amount to a meaningful sum every month for years, money that does nothing to reduce what you owe. This is why the 80% threshold drives so much borrower behavior. Many buyers stretch to put 20% down precisely to land at or below 80% LTV and avoid PMI entirely from day one — on this 5,000,000 property that means a 1,000,000 down payment. Others accept PMI temporarily, planning to shed it as soon as their equity climbs back over the 20% mark through payments or appreciation. The tool makes the stakes visible: it bands your ratio against the 80% and 95% lines, marks where you sit on the gauge, and reports exactly how far you are from the threshold. From the default position, paying the balance down by 250,000 — from 4,250,000 to 4,000,000 — would bring you to 80.0% and clear the PMI line. Knowing precisely where 80% sits for your numbers turns PMI from an opaque charge into a target you can plan around and eventually eliminate.
Combined LTV when a second mortgage or HELOC sits on top
The headline ratio measures your first mortgage against the value, but homes frequently carry more than one debt secured against them. A homeowner might keep a first mortgage and then take out a home equity line of credit or a second mortgage to fund a renovation or consolidate other debt. Lenders evaluate that situation through combined loan-to-value, or CLTV, which adds every loan secured by the property and divides the total by the same value. This calculator has a dedicated second mortgage / HELOC field for exactly this: enter that balance and the tool reports your CLTV alongside the first-lien LTV, rather than asking you to bundle the two together by hand. The arithmetic is straightforward but the implications are large. The default first mortgage of 4,250,000 against a 5,000,000 value is an 85.0% first-lien LTV; add a 500,000 HELOC and your CLTV becomes 4,750,000 ÷ 5,000,000 = 95.0%, deep into high-risk territory even though the first mortgage looks unchanged. Why does the combined figure matter so much? Because in a foreclosure the lenders are paid in order of priority, and a second-lien lender stands behind the first, recovering only what is left. That junior position is far riskier, so second mortgages and HELOCs carry higher rates and stricter CLTV limits — many cap total borrowing at 80% or 85% of value. Tapping equity feels like using money you already own, but every draw raises your combined ratio, erodes your cushion, and re-exposes you to the same downside risks that a falling market amplifies. Watching CLTV, not just first-lien LTV, keeps the full picture in view, and the calculator's separate equity figure shows how much of the home you still truly own once both liens are counted.
Planning toward a target LTV: max loan, required down and paydown
Knowing your current ratio is only half the value of this tool; the other half is planning to a number you choose. Set a target LTV — 80% by default, the PMI line — and the calculator works the arithmetic backwards to tell you what it would take to get there. The largest loan that meets a target is simply the value multiplied by the target: 5,000,000 × 80% = 4,000,000. From there two practical figures follow. For a purchase, the required down payment is the value minus that maximum loan, 5,000,000 − 4,000,000 = 1,000,000, or 20% of the price — the deposit that would start you exactly at the target. For an existing loan, the paydown needed is your current balance minus that maximum: from 4,250,000 today you would repay 250,000 to reach 80.0%. The tool also reports the gap in plain percentage points — here five points above target — and, when you sit below the target instead, the remaining borrowing headroom, meaning how much more you could borrow and still stay within it. The threshold comparison table extends this across the standard milestones at once, showing the maximum loan, the required down payment and the equity you would hold at 80%, 90%, 95% and 100% LTV, while the down-payment table runs the same logic from the other direction, mapping deposits from 0% to 30% onto the LTV and PMI status each would produce. Together these turn a vague intention — avoiding PMI, or simply wanting a thicker cushion — into a specific, costed plan: the exact deposit, the exact paydown, and the exact ratio each one would deliver.
Building equity through both payments and rising value
Your equity — and therefore your LTV — improves along two independent paths, and understanding both lets you plan deliberately rather than waiting passively. The first path is paying down the loan. Every scheduled payment on an amortizing mortgage reduces the principal a little, and that reduction directly shrinks the numerator of the ratio. Early on the principal portion is small because most of each payment covers interest, so equity from payments builds slowly at first and accelerates over the years. Extra principal payments speed this up dramatically: any amount paid above the schedule lowers the balance immediately and brings the 80% line closer — on the default loan, an extra 250,000 is the difference between 85.0% and 80.0%. The second path is appreciation: the property simply becoming worth more. Because LTV is the loan divided by the value, a rising value shrinks the ratio even if the balance never moves. In the default example the loan is 4,250,000 against a 5,000,000 value for an 85.0% LTV; if the value rose 10% to 5,500,000 while the loan held steady, the LTV would fall to 77.3% — under the PMI line — without you paying an extra cent. In practice the two paths work together, and over a typical holding period appreciation often does more to build equity than payments do, though it is the unreliable of the two. The crucial difference is control. You command the payment path entirely; the appreciation path is at the mercy of the market and can reverse. A sound strategy leans on the path you control to guarantee progress toward the equity thresholds that matter, while treating appreciation as a welcome bonus rather than a plan. Re-running this calculator periodically with your current balance and a fresh value estimate shows how far the two paths have carried you.
Falling values, negative equity, and going underwater
The same arithmetic that lets appreciation lower your LTV works in reverse when prices fall, and the consequences can be severe. Because the property's value is the denominator, a decline in value raises your ratio even though your loan balance is unchanged. This calculator builds the warning right in: starting from the default 85.0% LTV, a 10% drop in value from 5,000,000 to 4,500,000 lifts the ratio to 94.4%, turning an already-thin cushion into a sliver. Push the decline further and the math turns ugly. If values fell far enough that the property were worth less than the outstanding loan, your equity would turn negative — you would owe more than the home could sell for, a situation known as being underwater or having negative equity, which the tool flags explicitly with an over-100% warning. Negative equity is mostly invisible while you keep living in the home and making payments; it does no immediate harm. It becomes a genuine problem the moment you need to act. Selling means bringing cash to closing to cover the shortfall, because the sale proceeds do not clear the loan. Refinancing becomes difficult or impossible, since lenders will not lend more than the property is worth. And the situation tends to strike at the worst time, because broad price declines often coincide with the very economic stress that might force a sale. The defense is built at the start: a larger down payment and faster principal reduction keep more daylight between your balance and the property's value, so a normal market dip does not push you underwater. This is the deeper reason equity is called a cushion. It is not just a buffer for the lender; it is your own protection against being trapped by a market you cannot control.
LTV limits in refinancing and cash-out refinancing
When you refinance, the lender re-underwrites the loan from scratch, and your loan-to-value ratio is once again central to whether the deal works and on what terms. There are two broad cases, and they treat LTV very differently, which is why the calculator shows them side by side. A rate-and-term refinance simply swaps your existing loan for a new one with a better rate or different term, keeping the balance roughly the same — so the LTV is unchanged, and a low one is purely an advantage: if your equity has grown you may sit in a cheaper pricing tier than your original loan, and may have moved below 80% so that PMI can be dropped from the new loan entirely. A cash-out refinance is the opposite in spirit. You replace your loan with a larger one and take the difference in cash, which deliberately raises your LTV. Lenders cap how far you can push it, commonly limiting cash-out refinances to around 80% LTV, because every dollar you extract thins the cushion that protects them. Enter a cash-out amount in this tool and it computes the resulting balance and LTV and checks them against that 80% ceiling. At the default 85.0% there is no cash-out room at all, since the balance already tops 80% of the value; on a less-leveraged loan there would be — a 3,000,000 balance on the same 5,000,000 home sits at 60%, leaving 1,000,000 of room before the cap. Cash-out borrowing can be sensible — funding a renovation that adds value, or consolidating costlier debt — but it reverses the equity you have spent years building and resets your exposure to a downturn. Treat the LTV ceiling not as a target to max out but as a boundary, and borrow well inside it so a later dip in value does not leave you stretched.
The routes to removing PMI once you cross 80% and 78%
Private mortgage insurance is meant to be temporary, and once it is on your loan there are concrete, rule-bound ways to get rid of it — each tied to a specific LTV milestone you can track here. The first route is to request cancellation when your balance reaches 80% of the original property value. For borrowers on conventional loans you generally have the right to ask the servicer to cancel PMI at this point, provided your payment history is good. You can reach 80% faster than the schedule alone allows by making extra principal payments; set this tool's target to 80% and it shows the exact paydown remaining — 250,000 from the default balance. The second route is automatic: by law on many conventional loans the servicer must cancel PMI once the balance amortizes down to 78% of the original value, without you having to ask, again assuming you are current. The third route relies on the value side rather than the balance side: if your property has appreciated, a new appraisal may show that your loan is now 80% or less of the home's current value even though the balance has not fallen much — the same effect the tool shows when a 10% rise in value pulls the default LTV to 77.3%. Lenders have specific procedures and sometimes seasoning requirements for value-based removal, so it is worth asking your servicer what evidence they accept. The fourth route is a refinance into a new loan with no PMI once your equity clears 20%, which can make sense if a better rate is available too. The common thread is that every route is an LTV target. Knowing your current ratio — and how close it is to 80% or 78% — turns the vague hope of dropping PMI into a specific, reachable goal you can plan and act on.
Frequently asked questions
Why does 80% LTV matter so much?
Eighty percent is the line at which you hold 20% equity, the cushion most lenders treat as the dividing point for private mortgage insurance. At or below 80%, PMI is typically not required; above it — like the default 85.0% here — the lender's loss exposure in a foreclosure grows, so they charge PMI to cover that risk until you build more equity. The ratio also sorts borrowers into pricing tiers, so crossing the line affects both insurance and the interest rate you are offered.
How do I find the property value to plug in?
Use the current market value, not the price you originally paid. A lender will commission a formal appraisal, but for a quick estimate you can use a recent comparable-sales figure or an online valuation. Because the value is the denominator, even a modest change in it moves your LTV noticeably — which is exactly why this tool also shows what a 10% rise or fall would do to your ratio.
How is combined LTV (CLTV) different from LTV?
Plain LTV measures only your first mortgage against the value, while combined LTV stacks every loan secured by the home — first mortgage plus any second mortgage or HELOC — over the same value. Enter the second balance in the dedicated second-mortgage / HELOC field and the tool reports CLTV automatically. In the default scenario a 500,000 HELOC leaves the first-lien LTV at 85.0% but lifts CLTV to 95.0%, because in a foreclosure the junior lender is paid only after the first, so lenders watch the combined figure and cap it tightly.
How much do I need to pay down to drop PMI?
PMI generally falls away once your loan reaches 80% of the value. Set the target to 80% and the tool reports the gap: from the default 4,250,000 balance against a 5,000,000 value, paying down 250,000 brings the loan to 4,000,000, an 80.0% LTV, the point at which you can usually request cancellation. You can reach it faster with extra principal, and many conventional loans also cancel PMI automatically once the balance amortizes to 78% of the original value.
Can my LTV rise even though I keep paying down the loan?
Yes. LTV depends on both numbers, and the value can fall faster than your balance. The tool shows it: a 10% drop in value from 5,000,000 to 4,500,000 lifts the default LTV from 85.0% to 94.4% with the loan untouched. In a falling market your equity can shrink or even turn negative — owing more than the home is worth — which is why LTV is a moving target rather than a figure set at closing.
How much can I take out in a cash-out refinance?
Lenders typically cap a cash-out refinance near 80% LTV, so the most you can free is value × 80% minus your current balance. At the default 85.0% there is no room, because the balance already exceeds 80% of the value. On a less-leveraged loan the picture changes: a 3,000,000 balance on the same 5,000,000 home is at 60% LTV, leaving 5,000,000 × 80% − 3,000,000 = 1,000,000 of cash-out room. Enter a cash-out amount in Advanced and the tool flags whether it stays within the cap.
How does my LTV affect the interest rate I am offered?
Lenders price risk in tiers, and a lower LTV signals a safer loan because you have more of your own money at stake. Borrowers near 60–70% LTV often qualify for the best rates, while those at 90–95% face higher rates on top of PMI. Lowering your LTV — through a larger down payment, extra principal, or rising value — can move you into a cheaper pricing band, sometimes saving far more over the life of the loan than the extra equity costs you up front.