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Loan-to-Value (LTV) Calculator: How Much You Can Borrow

Loan-to-value ratio is the single number lenders lean on most to decide how much they will actually lend against a property.

LTV = loan amount Γ· appraised value Γ— 100

If a home appraises for $400,000 and you're borrowing $320,000, LTV is 320,000 Γ· 400,000 = 80%. Lenders use the lower of appraised value or purchase price when the two differ.

Max loan amount = appraised value Γ— allowed LTV

A lender offering up to 80% LTV on a $400,000 home would allow a maximum loan of $320,000, which means you'd need at least $80,000 as a down payment or existing equity.

The 80% LTV line usually triggers PMI

On conventional US mortgages, borrowing above 80% LTV typically requires private mortgage insurance (PMI), an added monthly cost that protects the lender, not the borrower, until enough equity is built up to cross back below 80%.

Existing loans against the property count against your LTV

If you already have a mortgage balance or a home equity loan on the property, that balance counts toward total LTV for any additional borrowing (sometimes called combined LTV, or CLTV), which shrinks how much more you can typically borrow.

Higher LTV usually means a higher interest rate

Beyond triggering PMI, a higher LTV signals more risk to a lender, so loans above 80%, and especially above 90-95%, often come with a somewhat higher interest rate even when approved, all else being equal.

Why lenders anchor so heavily on LTV

LTV directly measures a lender's exposure if a borrower defaults and the property has to be sold. A lower LTV means more of the borrower's own money is already in the property, which both lowers the lender's risk and gives the borrower a stronger incentive to keep paying.

LTV rules differ by loan type

Conventional loans, government-backed loans (like FHA in the US), and home equity products each set their own maximum allowed LTV and their own rules for when mortgage insurance kicks in or drops off, so the same appraised value can support a different maximum loan amount depending on which loan type is used.

Frequently Asked Questions

Can I avoid PMI without a 20% down payment?

Some lenders offer piggyback loan structures or lender-paid mortgage insurance that avoids traditional PMI, and certain government-backed loan programs have their own mortgage insurance rules instead of standard PMI β€” but these alternatives typically come with their own costs or tradeoffs.

Does LTV change after I close on the loan?

Yes β€” LTV recalculates as you pay down principal and, separately, as the property's market value changes. Rising home values can lower your effective LTV even before you request a formal reappraisal, though PMI removal usually still requires the lender to acknowledge it, often via a specific request process.