Interactive LTV Ratio Calculator

Calculate loan-to-value ratio with step-by-step explanations and visual gauge. Professional tool for mortgage analysis and risk assessment.

Property Details
Current Loan Balance
Remaining mortgage balance (e.g., $140,000)
Current Appraised Value
Current market value of the property (e.g., $400,000)
Please enter a valid positive appraised value to calculate the LTV ratio.
0% 80% Low 90% Moderate 100%+ High

LTV Ratio Formula

Understanding the calculation and risk interpretation

Loan-to-Value (LTV) Ratio Definition

The LTV ratio is calculated by dividing the current loan balance by the property’s current appraised value, then multiplying by 100:

LTV = (Current Loan Balance ÷ Current Appraised Value) × 100%

Home Equity Definition

Home equity is calculated by subtracting the current loan balance from the property’s current appraised value:

Equity = Current Appraised Value − Current Loan Balance

Interpretation Guide

  • LTV ≤ 80%: Low – Low risk for lenders, often qualifying for better rates and no PMI
  • LTV 80%–90%: Moderate – Moderate risk, possibly requiring PMI or higher rates
  • LTV > 90%: High – High risk, likely increasing borrowing costs and requiring PMI

How to Use the Calculator

Simple steps for accurate LTV analysis

1

Enter Loan Balance

Input remaining mortgage balance from your loan statement

2

Enter Property Value

Input current appraised value or market value of your home

3

Get Analysis

View LTV percentage with risk assessment and equity calculation

Frequently Asked Questions

The loan-to-value (LTV) ratio is a financial metric that compares the current loan balance of a mortgage to the property’s current appraised value, expressed as a percentage. It helps lenders assess the risk of a loan and determines borrower requirements like PMI and interest rates.

To calculate the LTV ratio: Determine the current loan balance, obtain the current appraised value of the property, divide the loan balance by the appraised value, and multiply by 100. Example: LTV = ($140,000 ÷ $400,000) × 100 = 35%.

Home equity is the portion of the property’s value that you own outright. It’s calculated by subtracting the current loan balance from the current appraised value: Equity = $400,000 − $140,000 = $260,000. Higher equity means lower LTV and less risk for lenders.

A good LTV ratio depends on lending standards: ≤80% is low risk (qualifies for best rates and no PMI), 80%–90% is moderate (may require PMI), and >90% is high risk (increases costs and PMI requirements). Aim for 80% or lower when possible.

The LTV ratio is important because it determines loan approval and interest rates, indicates risk level for lenders affecting PMI requirements, helps homeowners understand their equity and refinancing potential, and impacts borrowing costs throughout the loan term.

You can lower your LTV ratio by making extra principal payments to reduce the loan balance, improving the property value through renovations, waiting for natural market appreciation, or making a larger down payment when initially purchasing. Lower LTV means better loan terms.

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