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Loan-to-Value (LTV) Calculator

Find your loan-to-value ratio.

Result

80.00%

How it is calculated

Loan-to-value compares what you borrow with what the property is worth: LTV = loan / value × 100. The loan is the outstanding mortgage amount you are applying for, and the value is the appraised value or the purchase price of the property, in the same currency. Down payment is the other side of the coin: if LTV is 80%, you are paying 20% of the value from your own funds. The value must be greater than zero, otherwise no result is shown. A loan larger than the value gives an LTV above 100%. Lenders often use the lower of the appraisal and the purchase price as the value. Acceptable LTV limits, and any extra insurance at higher LTV, depend on the country and the lender, so check the rule that applies to you.

Worked example

You want to buy a home valued at 300,000 and ask for a mortgage of 240,000. Divide the loan by the value: 240,000 / 300,000 = 0.80. Multiply by 100 and the tool shows an LTV of 80.00%. This means your own contribution is 300,000 − 240,000 = 60,000, or 20% of the price. If the home were valued at only 280,000 by the appraiser, the same loan would be 240,000 / 280,000 = 85.71%.

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Common mistakes

  • Using the asking price when the lender values the home at a lower appraisal figure. The ratio then looks better than the one the bank will use.
  • Including closing costs, fees or renovation money in the loan amount without realising that the bank may count them differently.
  • Confusing LTV with the down payment percentage. They add up to 100%, so an 80% LTV means a 20% down payment.
  • Using the original loan amount for an existing loan. For a current LTV use the remaining balance.

Sources

About this calculator

This calculator finds the loan-to-value (LTV) ratio of a mortgage — the loan amount divided by the appraised value or purchase price of the property, expressed as a percentage. Lenders use LTV as a core risk measure: a lower LTV means more borrower equity and usually better loan terms.

Homebuyers use it to see whether they'll need private mortgage insurance (typically required above 80% LTV), and mortgage brokers use it to quickly compare loan offers.

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Comments (1)

  • Editorial team

    Lenders usually apply the ratio to the lower of the purchase price and their own appraisal, so check which value your bank will use rather than assuming the sale price. If the property already carries a second loan, add both balances to the loan field to get the combined ratio. Thresholds such as the 80% mark for mortgage insurance are US rules. Which country's lending rules would you like us to explain here?

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