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Loan-to-value ratio compares how much you're borrowing against a property's value, and it's one of the most important numbers lenders look at — a higher LTV generally means more risk for the lender, and often extra costs like mortgage insurance for the borrower.
This calculator finds your LTV ratio, your equity percentage, and flags whether PMI is likely required.
How it works
Enter the loan amount and the property's appraised value. The calculator divides one by the other to find your LTV ratio, subtracts from 100% to find your equity percentage, and checks whether your LTV crosses the common 80% PMI threshold.
- Enter loan amount.
- Enter property value (appraised).
- Click Calculate to see your results.
Examples
$320,000 loan, $400,000 value
A $320,000 loan against a $400,000 property has an 80% LTV and 20% equity — right at the threshold where PMI is typically no longer required.
Who should use it
- Checking whether a planned down payment will avoid PMI on a home purchase.
- Calculating current LTV before applying for a refinance or home equity loan.
Industry applications
- Mortgage lending and underwriting
- Real estate and home buying
Advantages
- Instantly flags whether you're likely to face PMI at your current LTV.
- Shows both LTV and equity percentage together for full context.
Limitations
- The 80% PMI threshold is a common convention, not a universal rule — always confirm your specific lender's policy.
Common mistakes to avoid
- Using the purchase price instead of the appraised value when the two differ — lenders typically base LTV on the lower of the two.
- Forgetting that PMI rules and thresholds can vary by loan type and lender, even though 80% is the most commonly cited benchmark.
Best practices
- If your LTV is just above 80%, consider whether a slightly larger down payment could get you under the threshold and avoid PMI altogether.
Tips
- Once your LTV naturally drops below 80% through paying down your mortgage (or through price appreciation), you can often request PMI cancellation from your lender rather than waiting for it to drop off automatically.