Loan To Value Calculator
Loan to value compares what you borrow with what the property is worth. Lenders use it to set pricing, and it decides whether mortgage insurance is required.
Loan to value
80.00%
- Equity
- 20.00%
- Equity in cash
- 60,000
- Maximum loan at 80 percent
- 240,000
- Deposit needed for 80 percent
- 60,000
Values update as you type. This calculator covers the single scenario its formula assumes — see Common Mistakes for what it leaves out.
The formula this calculator uses
LTV = loan amount / property value
- LTV
- The loan to value ratio, as a percentage
- loan
- The size of the mortgage, in currency
- value
- The appraised value or purchase price, whichever is lower
- equity
- The value minus the loan
How to check the result by hand
- 1
Establish the property value
Use the lower of the agreed price and the appraisal. In the example the home is valued at 300000 and the appraisal matches, so 300000 is the denominator.
- 2
Divide the loan by the value
240000 divided by 300000 is 0.8, so the LTV is 80 percent. Anything at or below this level avoids mortgage insurance with most lenders.
- 3
Find the equity
300000 minus 240000 is 60000 of equity, which is the 20 percent deposit expressed in cash. Equity percent is simply one minus the LTV.
- 4
Check the maximum loan
At an 80 percent ceiling the most this value supports is 240000, so the deposit of 60000 is exactly what is needed to stay at the threshold.
For worked examples, common mistakes and the limits of this formula, read the full How To Calculate Loan To Value page.