What Is Loan-to-Value (LTV)?
The loan-to-value ratio compares the amount you owe on a loan to the appraised value or purchase price of the property securing it. Lenders use LTV to gauge risk: a higher LTV means less equity cushion and often means higher interest rates or a requirement for private mortgage insurance (PMI).
The Formula
LTV is calculated as (Loan Amount / Property Value) × 100. For example, a $240,000 loan on a $300,000 home gives an LTV of 80%. Most conventional lenders require PMI when LTV is above 80%, though requirements vary by loan type and lender.
This calculator is for general planning and educational purposes. Lenders may calculate LTV slightly differently for refinances or use combined LTV (CLTV) when a second loan is involved.
Last reviewed August 2026