Free Loan-to-Value (LTV) Ratio Calculator: Assess Your Mortgage Risk
This calculator divides your loan amount by the property’s appraised value to show your Loan-to-Value (LTV) ratio; lenders normally require private mortgage insurance when LTV exceeds 80 % (CFPB, 2023).
Loan to Value (LTV) Calculator
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How to use the tool
Follow these steps to compute your Loan-to-Value (LTV) ratio:
Enter Mortgage Value. Example 1: $275 000; Example 2: $95 000.
Enter Appraised Property Value. Example 1: $325 000; Example 2: $120 000.
Select “Calculate”. Your LTV appears instantly below the form.
Review the label. The tool flags ≤ 80 % as low risk, 80-95 % as elevated, and > 95 % as high.
Because the ratio exceeds 80 %, many lenders add private mortgage insurance.
Quick-Facts
Lenders usually require PMI when LTV > 80 % (CFPB, 2023).
Conventional loans permit up to 97 % LTV for eligible borrowers (Fannie Mae Selling Guide, 2024).
PMI costs range 0.58 %-1.86 % of the loan annually (Urban Institute, 2023).
Average down payment for U.S. first-time buyers is 6 % (NAR, 2022).
FAQ
What is the Loan-to-Value ratio?
The LTV ratio compares your loan amount with the home’s appraised price, expressed as a percent (CFPB, 2023).
Why does an 80 % LTV matter?
Lenders waive PMI and offer better rates once your LTV falls at or below 80 % (Fannie Mae, 2024).
How can you lower LTV?
Pay down principal, make a larger down payment, or increase property value through improvements (HUD, 2023).
Can LTV exceed 100 %?
Yes. Negative equity occurs when loan balance tops home value, creating LTV above 100 % (FHFA, 2023).
Does refinancing reset your LTV?
Refinancing recalculates LTV with the new appraisal and remaining balance; equity rises if value increased (Bankrate, 2024).
How does PMI cost relate to LTV?
Higher LTV triggers higher PMI premiums; dropping from 95 % to 85 % can halve the fee (Urban Institute, 2023).
When can you request PMI removal?
You may cancel PMI once LTV hits 80 % (12 USC 4902). Automatic termination occurs at 78 %.
Is LTV the only approval factor?
No. Lenders also review credit score, debt-to-income ratio, and reserves (Freddie Mac, 2024).
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