Loan-to-Value Ratio Calculator
The loan-to-value (LTV) ratio is one of the most important metrics in consumer lending. It is calculated as the loan amount divided by the appraised value of the collateral, expressed as a percentage: LTV = Loan / Appraised Value * 100. A lower LTV indicates more borrower equity and less lender risk. For mortgages, an LTV at or below 80% allows you to avoid private mortgage insurance (PMI). For auto loans and personal loans, LTV affects your rate tier. Enter your loan amount and property or asset value to calculate your LTV instantly.
LTV ratio formula
LTV = Loan Amount / Appraised Value * 100
Equity % = 100 - LTV. Equity amount = Appraised Value - Loan Amount. Key LTV thresholds: 80% (conventional no-PMI limit), 96.5% (FHA minimum down payment), 100% (no equity).
LTV thresholds that affect your loan
- 80% or below: no PMI required on conventional loans; best rate tiers.
- 80 to 90%: PMI required on conventional loans; moderate rate premium.
- 90 to 95%: higher PMI premiums; fewer lender options.
- Above 95%: FHA/VA/USDA programs required for most borrowers.
- 78%: automatic PMI cancellation threshold under the Homeowners Protection Act.
Frequently asked questions
What is loan-to-value (LTV) ratio?
LTV ratio is the outstanding loan amount divided by the appraised value of the property, expressed as a percentage. For example, a $160,000 loan on a $200,000 home gives an LTV of 80%.
Why does LTV matter for lenders?
LTV measures how much equity protects the lender if you default. Lower LTV means more equity and less risk. Most conventional loans require LTV of 80% or less to avoid private mortgage insurance (PMI). Higher LTV loans are considered riskier and typically carry higher rates.
What LTV is needed to remove PMI?
Under the Homeowners Protection Act of 1998 (HPA), lenders must automatically cancel PMI when LTV reaches 78% based on original value (on a scheduled amortization basis). Borrowers can request cancellation at 80% LTV if they have a good payment history.
Does LTV affect my interest rate?
Yes. Higher LTV typically means higher interest rates because the loan represents more risk to the lender. Many lenders price loans in LTV tiers: below 60%, 60 to 70%, 70 to 80%, and above 80% each carries different rate adjustments.
How does a down payment affect LTV?
LTV = loan amount / appraised value = (purchase price - down payment) / purchase price. A 20% down payment gives 80% LTV. A 10% down payment gives 90% LTV. A 5% down payment gives 95% LTV.
Official sources
- CFPB: What is a loan-to-value ratio?
- Homeowners Protection Act of 1998 (HPA), 12 U.S.C. 4901: Full text (GovInfo).
Reviewed by the CalculatorHub team, edited by James Graham, 15 June 2026. See our methodology.