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Loan-to-Value (LTV) Ratio Calculator

Calculate a loan's loan-to-value ratio and implied equity from the property value and loan amount.

Loan-to-value (LTV) ratio
80%
Equity share
20%
Implied equity
$80,000.00
Where this falls
At or below the commonly cited 80% threshold, below which conventional lenders often waive PMI

How it works

Loan-to-value (LTV) ratio is the loan balance as a percentage of the property's value: LTV = (loan amount ÷ property value) × 100. It's a different question from this site's Debt-to-Income Ratio Calculator — LTV is about how much of the collateral's value is financed, not about how the payment compares to your income.

Implied equity is simply property value minus loan amount — the stake the borrower holds outright — assuming the loan and that equity together account for the full property value, which holds for a straightforward purchase or rate-and-term refinance with no other liens.

The 80% LTV mark is called out because it's a widely cited convention in conventional mortgage lending: at or below it, private mortgage insurance (PMI) is commonly waived; above it, many lenders require PMI until the balance is paid down enough. This is a general guideline, not any specific lender's actual policy.

FAQ

Why does 80% LTV matter specifically?

It's the long-standing convention many conventional (non-government-backed) mortgage lenders use as the cutoff for requiring private mortgage insurance, which protects the lender if the borrower defaults on a loan with less equity cushion. Actual PMI requirements vary by lender and loan program, so treat this as a common reference point, not a guarantee.

Can LTV go above 100%?

Yes — if the loan balance exceeds the property's current value (often from a market decline or a high-LTV loan at origination), LTV exceeds 100% and equity is negative, commonly called being 'underwater' on the loan. This calculator reports that case directly rather than treating it as invalid input.

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