Loan-to-Value (LTV) Calculator
Check your LTV ratio, your home equity, and exactly how much more principal or appreciation gets you to the 80% mark where PMI goes away.
The LTV formula
Balance $240,000 · home value $320,000
LTV = 240,000 ÷ 320,000 = 75% → equity of $80,000 (25%). Already under 80%, so PMI shouldn't apply.
A $300,000 home has a $200,000 first mortgage and a $40,000 HELOC taken out for renovations. Standalone first-mortgage LTV = 200,000 ÷ 300,000 = 66.7%.
But combined LTV (CLTV) counts both loans: (200,000 + 40,000) ÷ 300,000 = 80%. Lenders evaluating a new HELOC, second mortgage, or refinance use this combined figure, not just the first mortgage's LTV — so the homeowner has less additional borrowing room than the 66.7% number alone would suggest.
Common LTV mistakes
- Calculating LTV on just the first mortgage when a HELOC or second lien exists. As above, lenders combine every loan secured by the property (CLTV) — ignoring the second lien understates your true leverage.
- Using the original purchase price instead of current appraised value. LTV for PMI removal and refinancing is based on current value, which can be higher or lower than what you paid depending on market movement.
- Assuming a lower LTV always means a better rate immediately. Rate tiers are usually set at specific thresholds (e.g., 80%, 90%, 95%) — crossing from 81% to 80% helps, but going from 85% to 82% may not change pricing at all.
Why LTV matters
| LTV | What it means |
|---|---|
| ≤ 80% | No PMI; best rates; refinance and HELOC eligible |
| 80–90% | PMI on conventional loans; decent options |
| 90–97% | Higher rates and PMI; fewer programs |
| > 100% | "Underwater" — you owe more than the home is worth |
Lenders read LTV as risk: the more equity you hold, the more cushion they have if you default. Getting under 80% unlocks PMI removal (request at 80%, automatic at 78% under the Homeowners Protection Act), better refinance pricing, and home equity borrowing. You can get there faster with extra principal payments — or via a new appraisal if your market has appreciated.
Frequently asked questions
What is a good loan-to-value ratio?
80% or below — it avoids PMI and gets the best rate tiers. Above 95–97%, options narrow considerably.
How do I calculate my LTV?
Loan balance ÷ current home value × 100. $240,000 on a $320,000 home = 75%.
At what LTV can I remove PMI?
Request cancellation at 80% LTV; lenders must auto-terminate at 78% on conventional loans.
What is combined loan-to-value (CLTV)?
All loans on the home combined, divided by value. $200,000 first + $40,000 HELOC on a $300,000 home = 80% CLTV, even though the first mortgage alone is 66.7%.
Does LTV affect my mortgage interest rate?
Yes — lower LTV typically means a better rate tier in addition to avoiding PMI, though rate breaks usually apply at specific thresholds like 80% or 90%.
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Note: Lender LTV rules vary by program; home value estimates require an appraisal for official use. Not financial advice. Last reviewed: September 2026.