Understanding Loan-to-Value (LTV)
How we calculate. LTV % = (loan ÷ value) × 100. The form uses the same arithmetic as the worked examples on this page. See our methodology and accuracy policy.
Real-world scenario: A typical Loan-to-Value (LTV) case uses loan amount 320000 and property value 400000. Enter the same figures below to reproduce the worked path.
What is Loan-to-Value (LTV)?
A lending risk metric. Higher LTV means less equity cushion—often tied to mortgage insurance thresholds.
- Use appraisal or purchase price per lender rules
- Combined LTV includes second liens
- Equity % ≈ 100 − LTV when definitions match
The Formula
Worked Example
Common Use Cases
- Mortgage quotes: PMI thresholds
- Refinance checks: equity position
- HELOC planning: available equity
Pro Tips
- Falling values raise LTV
- Extra principal cuts LTV
- Ask which value the lender uses
Limitations: Loan-to-Value (LTV) results are educational finance aids—not loan offers, investment advice, or tax counsel. Confirm figures with a qualified professional and your contract.
FAQ
LTV vs down payment %?
At purchase, LTV ≈ 100% − down payment % when there are no fees rolled in.
CLTV?
Combined LTV adds secondary financing. Sum all liens before dividing by value.
Authoritative References
For lending and investing concepts, consult:
- CFPB — consumer lending and mortgage education
- Investopedia — finance formula explainers
- SEC Investor.gov — investor education