How to use this LTV calculator
Two numbers give you the answer; two more fine-tune it.
- Property value: what the home is worth today, or the purchase price if you are buying.
- Mortgage balance: what you owe on your main home loan, or the amount you plan to borrow.
- Open "More options" to add a second loan / HELOC balance and to change the target LTV from 80% to whatever your lender uses.
The result shows your LTV and the band it falls in, your equity in dollars and as a percentage, how much you would need to pay down to hit your target, and how much equity you could borrow against at that target. The chart shows how your LTV would change if your home's value moved by up to 20% either way.
The LTV formula
Loan-to-value is simply the share of your home that the bank has lent you money against. The rest, the part you own outright, is your equity.
LTV = Mortgage ÷ Value × 100 · CLTV = (Mortgage + other secured loans) ÷ Value × 100 Value = appraised or market value of the property · CLTV = combined loan-to-value
Equity = Value − all loans · Usable equity = Value × Target − all loans Target = your target LTV as a decimal (80% = 0.8) · if all loans exceed Value × Target, the gap is what you need to pay down
Worked example
Your home is worth $400,000 and you owe $300,000. Your LTV is 300,000 ÷ 400,000 = 75%, and your equity is $100,000, or 25% of the value.
At an 80% target, total borrowing can be up to 0.8 × $400,000 = $320,000. You already owe $300,000, so your usable equity is $20,000. You are 5 percentage points below the line. If the home's value fell 6.3%, to $375,000, you would be at exactly 80%; a 10% fall would take you to 83.3%.
Now add a $40,000 HELOC. Your LTV on the first mortgage is still 75%, but your combined LTV is 340,000 ÷ 400,000 = 85%. To get back to 80% you would need to pay down $20,000, or for the home to be worth $425,000.
What each LTV band usually means
Lenders price risk in bands. The exact cut-offs vary by lender and country, but the pattern is consistent: the lower your LTV, the cheaper and easier borrowing becomes.
| LTV | Mortgage insurance | What to expect |
|---|---|---|
| 60% or less | Not needed | The lowest-risk band, often with the best rates and the most flexibility to refinance or borrow more. |
| 60–80% | Usually not needed | Standard rates from most lenders. 80% is the most important line to stay under. |
| 80–90% | Usually required | PMI in the US or LMI in Australia, and often a slightly higher rate. |
| Over 90% | Almost always required | Higher insurance cost, fewer lenders and little cushion if prices fall. |
| Over 100% | n/a | Negative equity: you owe more than the home is worth, so selling or refinancing needs extra cash. |
Mortgage insurance protects the lender, not you, if you stop paying. In the US, PMI is usually a monthly charge that can be removed later. In Australia, LMI is normally a one-off premium, often added to the loan, which makes the loan itself larger.
Small differences matter near a cut-off. A loan at 80.5% is "over 80" to most lenders, so if you are close, paying down the last few thousand dollars or adding a little to your deposit can save you the whole insurance premium. Lenders may also set lower LTV limits when you borrow against a home for investment, so confirm the target that applies to you.
How to lower your LTV
- Pay down the principal. Every repayment helps, and extra repayments help faster. The extra repayments calculator shows how quickly they cut your balance.
- Put more down when you buy. Each extra 5% deposit drops your starting LTV by 5 points. The savings goal calculator shows how long it would take to save the gap.
- Let the value work for you. If prices in your area have risen, a new appraisal may show a lower LTV than your original paperwork.
- Avoid adding to secured debt. A HELOC or cash-out refinance raises your combined LTV, which can bring mortgage insurance back on a new loan.
Rule of thumb: aim for an 80% LTV or lower before you refinance. Below that line most lenders will offer their standard rates without mortgage insurance, which can make the switch worth far more. The refinance calculator shows your break-even point.
Why LTV matters when you buy
LTV links your deposit and your borrowing. A 20% down payment means an 80% LTV from day one, which is why 20% is the usual target deposit. If you are working out a budget, the home affordability calculator flags when your price would push the LTV above 80%, and the mortgage calculator shows the repayment once you add mortgage insurance.
LTV also matters after you buy. If prices fall, your LTV rises even though you owe the same amount. The chart above shows that a 10% fall in value would take the example home from 75% to 83.3%. That does not change your repayment, but it can make refinancing or borrowing against the home harder until prices recover.
LTV and LVR around the world
- United States: lenders talk about LTV and CLTV. PMI applies to most conventional loans above 80% LTV.
- Australia and New Zealand: the same ratio is called LVR. LMI is usually charged above 80% LVR.
- United Kingdom: lenders price mortgages in LTV tiers, commonly 60%, 75%, 85%, 90% and 95%, so dropping into a lower tier at remortgage time can cut your rate.
- Canada: mortgage default insurance is required when you put down less than 20%, and banks limit a HELOC to 65% of the home's value, or 80% combined with your mortgage.
Frequently asked questions
What is a good loan-to-value ratio?
What is the difference between LTV and CLTV?
Is LVR the same as LTV?
What property value do lenders use?
How do I get rid of PMI?
How much equity can I borrow against?
This calculator gives estimates for education and planning. It is not financial advice, and your lender's figures may differ. See how we calculate.