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Loan-to-Value (LTV) Ratio Calculator

Calculate your loan-to-value ratio and evaluate mortgage eligibility, risk category, and lender terms.

Results

LTV Ratio: –

Risk Category: –

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    📘 Overview: What Is the Loan-to-Value (LTV) Ratio?

    The Loan-to-Value (LTV) Ratio Calculator is a simple but powerful tool that evaluates the ratio between your loan amount and the appraised value of a property. It’s widely used in real estate, mortgage underwriting, refinancing, and risk evaluation.

    A lower LTV typically indicates lower risk for the lender and could help you qualify for better loan terms, lower interest rates, and avoid private mortgage insurance (PMI).

    • 🏡 Ideal for mortgage pre-qualification
    • 💼 Common in refinancing or second mortgage decisions
    • 🔐 Helps understand lender risk exposure
    • 📉 Shows how down payments affect approval chances

    Whether you're a homebuyer, investor, or advisor, this calculator provides instant insight into your borrowing profile.

    📐 Formula & Methodology

    The LTV ratio is calculated using the following formula: 

    LTV (%) = (Loan Amount ÷ Property Value) × 100

    Where:

    • Loan Amount = Total borrowed principal
    • Property Value = Appraised or purchase value of the asset

    The result is then classified into a risk category:

    • ✅ Low Risk: LTV ≤ 60%
    • 🟡 Moderate Risk: 61% – 80%
    • 🟠 High Risk: 81% – 90%
    • 🔴 Very High Risk: LTV > 90%

    Most lenders use these thresholds to determine loan approval conditions and insurance requirements.

    📊 Examples

    • 🏠 Loan: $80,000; Property Value: $100,000 → LTV = 80% → Moderate Risk
    • 🏡 Loan: €120,000; Property Value: €150,000 → LTV = 80% → Moderate Risk
    • 🏘️ Loan: £95,000; Property Value: £100,000 → LTV = 95% → Very High Risk

    The calculator instantly determines the LTV and tells you which category your loan falls into.

    📌 Use Cases

    • ✅ Checking mortgage eligibility before applying for a home loan
    • 🔁 Evaluating the benefits of refinancing your mortgage
    • 📋 Understanding risk levels before a second mortgage or HELOC
    • 💰 Assessing how larger down payments affect borrowing power
    • 📊 Determining if private mortgage insurance (PMI) is needed

    ❓ Frequently Asked Questions

    What is a good LTV ratio?

    Generally, lenders consider an LTV of 80% or lower as favorable. At or below this threshold, you may avoid PMI and qualify for lower interest rates.

    Does a higher down payment lower my LTV?

    Yes. Increasing your down payment reduces the loan amount, which directly lowers your LTV percentage.

    How does LTV impact loan approval?

    A lower LTV improves your chances of approval and may reduce required documentation. A high LTV may trigger insurance requirements or stricter underwriting.

    Is LTV the same as CLTV?

    No. LTV considers a single loan against a property, while Combined Loan-to-Value (CLTV) accounts for multiple loans (like a first and second mortgage) secured by the same property.

    Can I use market value instead of appraised value?

    You can, but lenders typically require an official appraisal. Market value estimates may not be accepted during underwriting.

    Does this tool support different currencies?

    Yes. You can enter amounts in $, €, £, ₹, or any currency. The ratio is percentage-based, so units don’t affect accuracy.

    How often should I check my LTV?

    It’s good to check annually or whenever the property value changes significantly (e.g., after renovations or market appreciation).