What is a loan-to-value (LTV) ratio?

LTV (Loan-to-Value) ratio is the loan amount divided by the home's appraised value, expressed as a percentage. LTV = (Loan Amount / Home Value) × 100. An 80% LTV means you borrowed 80% of the home's value and have 20% equity. LTV is a key metric lenders use to assess risk — lower LTV means less risk and typically better rates.

What LTV is needed to remove PMI?

You can request PMI cancellation once your LTV reaches 80% (based on original purchase price). PMI automatically cancels by federal law (Homeowners Protection Act) when your balance reaches 78% of the original purchase price. If your home has appreciated significantly, you may qualify for PMI removal sooner based on a new appraisal — many lenders allow this after 2 years of on-time payments.

What is CLTV (Combined Loan-to-Value)?

CLTV combines the balances of all mortgages (first mortgage, second mortgage, HELOC) against the home's value. CLTV = (First Mortgage + Second Mortgage + HELOC) / Home Value × 100. Lenders use CLTV when you apply for a HELOC or second mortgage — most require CLTV below 85–90%. Your first mortgage may have a lower LTV, but a HELOC on top can push CLTV higher.

How does LTV affect my mortgage rate?

Lower LTV generally means better mortgage rates because the lender has less risk. Most lenders have rate 'tiers' at key LTV levels: below 75%, below 80%, below 85%, below 90%, and below 95%. Moving from 90% LTV to 80% LTV by putting more down (or having equity from appreciation) can reduce your rate by 0.125%–0.375% depending on the lender and loan type.

How can I lower my LTV ratio?

You can lower your LTV by: (1) Making extra principal payments to pay down the loan faster; (2) Allowing natural home appreciation over time; (3) Getting a new appraisal if the market has risen; (4) Making a larger down payment at purchase. Combining extra payments and appreciation is the fastest way — our LTV Timeline chart shows how quickly you can reach key thresholds like 80% and 78%.

LTV Calculator

Calculate your loan-to-value ratio, equity amount, and PMI status instantly. See the LTV timeline with appreciation, find out exactly when PMI drops off, and check your refinance eligibility by program.

Home Value / Purchase Price

Loan Amount

Second Mortgage / HELOC

Loan Term

LTV Ratio

80.0%

$80,000 equity (20.0% of home value)

Equity Amount

$80,000

CLTV (with 2nd)

N/A

PMI Required

Equity %

20.0%

Advanced

Advanced Calculator

LTV timeline, PMI threshold, key LTV levels explained

Interest Rate

Annual Appreciation

LTV decreases over time from both amortization and home appreciation. The chart shows your LTV path to 0.

Year	Home Value	Loan Balance	LTV	Equity
Year 0	$400,000	$320,000	80.0%	$80,000
Year 1	$414,000	$316,749	76.5%	$97,251
Year 5	$475,075	$301,221	63.4%	$173,853
Year 10	$564,240	$274,600	48.7%	$289,640
Year 15	$670,140	$236,860	35.3%	$433,279
Year 20	$795,916	$183,360	23.0%	$612,555
Year 25	$945,298	$107,517	11.4%	$837,781
Year 30	$1,122,717	$0	0.0%	$1,122,717

Pro

Professional Simulator

CLTV analysis, refinance eligibility by program, appraisal impact

CLTV (Combined Loan-to-Value) includes all mortgages — first, second, and HELOCs — against the home value.

Second Mortgage / HELOC Balance

First Mortgage LTV

80.0%

$320,000 / $400,000

Combined LTV (CLTV)

N/A

No second mortgage entered

Total Debt Secured

$320,000

All mortgage debt

Total Equity

$80,000

After all liens

HELOC Available

$20,000

Est. at 85% CLTV limit

Home Equity Loan Max

$40,000

Est. at 90% CLTV limit

Most lenders limit total borrowing (CLTV) to 85–90% of home value for home equity products. With $400,000 home value, you may be able to borrow up to $20,000 via a HELOC or $40,000 via a home equity loan (subject to income/credit qualification).

How to Use This LTV Calculator

Enter your home value and loan details to instantly see your LTV ratio and all related metrics.

Quick Calculator

Enter your Home Value (purchase price or current appraised value), Loan Amount (first mortgage balance), and optionally a Second Mortgage / HELOC balance. The calculator shows your LTV ratio, equity amount and percentage, whether PMI is required (with estimated monthly cost), and your CLTV if you have a second lien.

Advanced — LTV Timeline, PMI Threshold, Key LTV Levels

The LTV Timeline tab charts your LTV path over time, factoring in both loan amortization and home appreciation — you can adjust the appreciation rate to see different scenarios. The PMI Threshold tab shows exactly which month PMI can be requested (80% LTV) and when it auto-cancels by law (78% LTV). The Key LTV Levels tab explains what each major LTV milestone (97%, 95%, 90%, 80%, 78%, 75%) means for your financing options.

Professional — CLTV Analysis, Refinance Eligibility, Appraisal Impact

CLTV Analysis shows how adding a HELOC or second mortgage affects your combined ratio and maximum borrowing capacity. Refinance Eligibility checks your current LTV against 10 major loan programs to show which you qualify for. Appraisal Impact lets you enter a different appraised value to see how it changes your LTV, PMI status, and equity — useful when requesting PMI removal or planning a refinance.

How LTV Is Calculated

LTV = (Loan Amount / Home Value) × 100

Equity Amount = Home Value − Loan Amount
Equity Percentage = (Equity / Home Value) × 100 = 100% − LTV

CLTV = (First Mortgage + Second Mortgage + HELOC) / Home Value × 100

Example:
Home Value: $400,000 | Loan Amount: $320,000
LTV = ($320,000 / $400,000) × 100 = 80%
Equity = $400,000 − $320,000 = $80,000 (20%)
PMI required: No (LTV = 80%, at the threshold)

With a $30,000 HELOC:
CLTV = ($320,000 + $30,000) / $400,000 × 100 = 87.5%

Example: PMI Removal Timeline for Sarah

Sarah bought with 10% down — Chicago, IL

Sarah bought a $380,000 home with 10% down ($38,000), leaving a $342,000 loan at 7.0% for 30 years. She wants to know when PMI drops off.

Home Price	$380,000
Down Payment (10%)	$38,000
Initial Loan Amount	$342,000
Starting LTV	90%
Monthly PMI	~$143/month
LTV Reaches 80% (Request)	Month 94 (Year 7.8)
LTV Reaches 78% (Auto-Cancel)	Month 118 (Year 9.8)
Total PMI Paid	~$16,874 (without appreciation)
With 3.5% appreciation, 80% LTV	Year 4 (faster)

By requesting PMI removal at 80% LTV in year 7.8, Sarah saves about 2 years of PMI payments (~$3,432). If Chicago home values appreciate 3.5% annually, she reaches 80% LTV in just 4 years based on market value — potentially saving over $5,000 in PMI by getting a new appraisal.

Frequently Asked Questions

LTV (Loan-to-Value) is the loan amount divided by the home's appraised value, expressed as a percentage. An 80% LTV means your loan is 80% of the home's value and you have 20% equity. LTV is one of the most important metrics in mortgage lending — it determines whether you need PMI, what programs you qualify for, and often affects your interest rate. Lower LTV = less risk for the lender = better terms for you.

You can request PMI cancellation when your LTV reaches 80% based on the original purchase price. PMI automatically cancels by federal law (Homeowners Protection Act of 1998) when your LTV reaches 78% based on the original purchase price. If your home has appreciated, you may be able to request removal sooner using a new appraisal — most lenders require at least 2 years of on-time payments and LTV ≤80% based on current value.

CLTV combines all mortgage liens against a property divided by home value. It includes your first mortgage plus any second mortgage, home equity loan, or HELOC balance. Lenders use CLTV when you apply for home equity products — most require CLTV below 85–90%. You might have a 70% LTV first mortgage but a 90% CLTV if you also have a HELOC, which affects what additional home equity borrowing you can do.

Lower LTV typically earns better rates through LLPA (Loan-Level Price Adjustments). Most lenders have pricing tiers at: 75.01–80%, 80.01–85%, 85.01–90%, 90.01–95%, and 95.01–97%. Moving down a tier by putting more down or building equity can reduce your rate by 0.125%–0.5%. At 75% LTV, you typically get the best conventional rate pricing available.

Four ways to lower LTV: (1) Make extra principal payments — each extra dollar reduces balance and LTV; (2) Wait for appreciation — if your market is growing, your home value rises while the balance falls; (3) Get a new appraisal — if your home has appreciated since purchase, a new appraisal can reflect current value; (4) Put more money down at purchase. The fastest approach combines extra payments with natural appreciation. Our LTV Timeline chart shows how your LTV path changes with different appreciation assumptions.