What is a loan-to-value ratio?
Your loan-to-value ratio, or LTV, is the percentage of a home's value covered by its first mortgage. A $320,000 mortgage on a $500,000 property has a 64% LTV. A lower ratio means the first mortgage occupies a smaller share of the entered value, although other secured debts still matter.
This mortgage LTV calculator also measures combined loan-to-value (CLTV), which includes other loans secured by the property, and home equity. Use it to explore a home purchase, prepare for refinancing or see how paying down your balance changes your position. LTV is one part of a lender’s assessment; it does not measure whether your income can support the payments.
How to use the LTV calculator
- Enter the property value. Use a realistic current estimate for an existing home. The calculator has one value field and does not compare a purchase price with an appraisal. Confirm the appropriate basis with the lender.
- Add your mortgage balances. Enter the first mortgage, any second mortgage and the amount drawn on a home equity line of credit (HELOC). Avoid entering the same debt twice.
- Enter the HELOC credit limit. Include the full line limit, even if only part is drawn. This is used for HCLTV.
- Compare a proposed loan. Enter the replacement first mortgage and any second mortgage that would remain or be added. The proposed combined ratio keeps your entered HELOC balance unchanged.
- Choose a target LTV. See the first‑mortgage balance allowed by that percentage, the paydown needed and the property value required for your proposed loan.
For a purchase, subtract your down payment from the price to estimate the first mortgage, assuming no other financing or financed fees. Enter that amount as the first mortgage to explore the purchase. Our down payment calculator can help compare upfront contributions.
How to calculate loan-to-value
LTV (%) = first mortgage balance ÷ property value × 100.
For example, a $400,000 home purchased with an $80,000 down payment requires a $320,000 mortgage. Dividing $320,000 by $400,000 gives 0.80, or 80% LTV. With a $40,000 down payment instead, the $360,000 mortgage produces a 90% LTV, assuming the same accepted property value.
Home equity uses all outstanding secured debt: equity = property value − first mortgage − second mortgage − drawn HELOC balance. Unused HELOC credit is not money already owed, so it does not reduce the equity amount shown here.
LTV vs. CLTV vs. HCLTV: one home, three ratios
Consider a $500,000 property with a $320,000 first mortgage, a $30,000 second mortgage and $20,000 drawn from a $50,000 HELOC. Each ratio answers a different question:
| Measure | Debt included | Result |
|---|---|---|
| LTV | First mortgage: $320,000 | 64% |
| CLTV | First mortgage + second mortgage + drawn HELOC: $370,000 | 74% |
| HCLTV | First mortgage + second mortgage + full HELOC limit: $400,000 | 80% |
| Home equity | $500,000 value − $370,000 outstanding debt | $130,000 (26%) |
The unused $30,000 of HELOC credit explains the difference between CLTV and HCLTV. Under Fannie Mae’s HCLTV guidance, the full HELOC amount counts, whether drawn or not. A low first‑mortgage LTV can therefore coexist with a much higher combined ratio.
What is a good LTV ratio for a US mortgage?
A lower LTV generally means more equity and may help with mortgage pricing or available loan options. However, 80% is a reference point, not a universal approval cutoff. Lenders also consider credit history, debt‑to‑income ratio, occupancy, property type and loan purpose.
For conventional mortgages, a down payment below 20% often brings private mortgage insurance (PMI) into the picture. PMI protects the lender, and its cost matters alongside the interest rate and closing costs. A smaller down payment can preserve savings but may increase borrowing costs. See the CFPB explanation of PMI.
Three US mortgage details that can change your interpretation
PMI cancellation uses a different value test
For many conventional loans covered by federal PMI rules, borrowers can request cancellation at 80% of the home’s original value, subject to conditions. Automatic termination generally occurs when the scheduled balance reaches 78%, provided payments are current. Original value is typically the lower of the purchase price or original appraisal; refinancing uses the appraised value at refinance.
A current‑value LTV of 80% on this calculator does not itself cancel PMI. Appreciation‑based cancellation may follow separate investor requirements, and FHA mortgage insurance follows different rules. Ask your servicer which process applies. Read the CFPB’s PMI cancellation guidance.
An 80‑10‑10 mortgage still means 90% combined borrowing
In an 80‑10‑10 structure, the buyer uses an 80% first mortgage, a 10% second mortgage and a 10% down payment. On a $400,000 home, that is $320,000 plus $40,000 of secured loans and $40,000 paid upfront. First‑mortgage LTV is 80%, but CLTV is 90%.
This structure may avoid PMI on the first mortgage but adds another loan with its own interest, fees and repayment terms. Compare the total cost with a single mortgage carrying PMI. The CFPB’s piggyback mortgage guide explains the tradeoff.
A higher appraisal may not reduce purchase LTV
For a typical conventional purchase, the qualifying value is generally the lower of the sales price or appraisal. If you agree to pay $400,000 and the appraisal is $420,000, a $320,000 mortgage still works out to 80% using the purchase price. An appraisal below the price can instead push the ratio higher. Confirm the valuation rules for your program before choosing the calculator’s input.
Using a target LTV for refinancing or paying down debt
Multiply the property value by your target percentage to find the corresponding first‑mortgage amount. At a $500,000 value and an 80% target, that is $400,000. A current first mortgage of $425,000 would need a $25,000 principal reduction to reach the target if the value stayed unchanged.
The calculator’s first‑mortgage borrowing room is the difference between that target amount and your current first mortgage, with a minimum of zero. It does not deduct second mortgages, HELOC debt or closing costs, and is not a cash‑out quote or HELOC limit. A lender’s combined‑ratio limits may leave less room.
When comparing a refinance, include financed costs in the proposed loan amount where applicable. The proposed combined LTV assumes your entered HELOC balance remains outstanding; it does not automatically model paying it off. Use the U.S. mortgage refinance calculator to compare payments and closing costs separately.
How to lower your loan-to-value ratio
A larger down payment lowers purchase LTV. For an existing mortgage, principal repayments reduce the balance; reducing a second mortgage or drawn HELOC lowers CLTV but does not change first‑mortgage LTV. An accepted increase in property value can lower both ratios, although renovations do not necessarily add their full cost to an appraisal.
Values can fall, too. A $320,000 mortgage is 80% of a $400,000 home, but about 88.9% if the home falls to $360,000. The balance has not increased; the equity cushion has shrunk. Explore that risk by adjusting the property value while keeping loan balances fixed.
For the monthly cost of borrowing, use our U.S. mortgage calculator. For a closer look at the value left after secured debt, see the home equity calculator.