Free Loan-to-Value Calculator

Calculate the loan-to-value ratio used by lenders to assess risk and determine PMI requirements.

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USD

Loan-to-Value Ratio

80.00%

Equity Percentage20.00%
Equity Amount$70,000

Loan-to-Value Ratio vs Loan Amount

View formula & how it works →

Loan-to-Value Ratio Explained

LTV measures how much of the property value is financed, and is a key factor in lending decisions.

Formula

LTV = (Loan Amount / Appraised Value) x 100

LTV Thresholds

  • Below 80%: Typically no PMI required
  • 80-95%: PMI usually required for conventional loans
  • Above 95%: Higher-risk territory, limited loan options
  • Above 100%: Underwater (owe more than property is worth)

    • Example Calculation

    A borrower has a $280,000 loan on a property appraised at $350,000.

    1. 01LTV = $280,000 / $350,000 = 0.80
    2. 02LTV = 80.00%
    3. 03Equity percentage: 100% - 80% = 20.00%
    4. 04Equity amount: $350,000 - $280,000 = $70,000
    5. 05At 80% LTV, PMI is typically not required

    Frequently Asked Questions

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