Home Buying
Loan-to-value ratio
Loan divided by value. Above 0.80 on a conventional loan triggers private mortgage insurance and often a higher rate.
The Formula
LTV = Loan Amount / Purchase Price
Loan divided by value. Above 0.80 on a conventional loan triggers private mortgage insurance and often a higher rate.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| LTV | Loan-to-value ratio | ratio | Multiply by 100 for the percentage form. 0.80 is the conventional no-insurance threshold. |
What Each Symbol Means
LTVratio
Loan-to-value ratio
Multiply by 100 for the percentage form. 0.80 is the conventional no-insurance threshold.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate a down payment page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate A Down Payment, filed under Finance. Every number the guide produces comes from substituting into this one line.