Your loan-to-value ratio — LTV for short — is the single number lenders use to judge how much skin you have in the game. It compares what you still owe on the home to what the home is actually worth, and it decides whether you qualify for the best rate, whether you must pay private mortgage insurance (PMI), and whether refinancing is even worth the paperwork. This Smekys calculator gives you that ratio in seconds, along with your raw home equity and your equity as a percentage of value.
Enter two numbers — the current home value and your remaining loan balance — and the result updates instantly. Because everything runs in your browser, no numbers ever leave your device.
How to Use
- Enter the Home Value. Use a recent appraisal, a zestimate-style estimate, or your purchase price if you have not had the home valued since you bought. This is the denominator of the ratio.
- Enter your Remaining Loan Balance — the outstanding principal you still owe. Your mortgage statement or online portal shows this to the dollar.
- Read the result card. Loan-to-Value Ratio is your headline figure; Home Equity and Equity as % of Value show the wealth you have built in the property. The PMI Required? line reads
1when your LTV is above 80% (conventional lenders still charge private mortgage insurance) and0at or below that threshold. - Compare your ratio to the lender thresholds below. Below 80% you are in the no-PMI zone; at 80–95% you have some equity but may still pay PMI; above 95% you are highly leveraged.
- To test a refinance or a cash-out scenario, bump the home value up or down. If your local market rose, your LTV has likely dropped even though your payment has not changed.
How LTV Is Calculated
The formula is deliberately simple:
LTV = (Loan Balance ÷ Home Value) × 100
And your equity is just the other side of the same coin:
Equity = Home Value − Loan Balance
Worked example: a home worth $400,000 with a $320,000 balance. Divide 320,000 by 400,000 to get 0.80, multiply by 100, and your LTV is 80.0%. Your equity is $80,000, which is 20% of the home value. That 80% line matters: it is the classic point at which conventional lenders stop requiring PMI, and the point at which you can ask your servicer to cancel it.
Notice that LTV moves for two reasons. Paying down the loan lowers the numerator, and a rising market raises the denominator — both push your ratio down. That is why homeowners who bought several years ago often discover they are suddenly mortgage-insurance-free even though their balance has fallen only modestly.
Why LTV Matters
- Mortgage approval. Lower LTV means lower risk to the lender, which usually translates into a lower interest rate. Borrowers above 80% LTV routinely pay a premium.
- PMI. On a conventional loan, private mortgage insurance is required when you put less than 20% down — effectively an LTV above 80% at closing.
- Refinancing. If your LTV is too high, refinancing to a lower rate can be blocked entirely, or limited to expensive programs like FHA streamline.
- Cash-out refinance. Most lenders cap cash-out LTV at 80%. Any equity beyond that ceiling stays locked in the house.
- HELOC access. Home equity lines of credit are sized against the amount of equity above the lender's maximum combined LTV.
Examples
Example 1 — The 20% down benchmark. A couple bought a $400,000 home with 20% down, so the original loan was $320,000. Years later the balance is still roughly $320,000 (early payments are mostly interest) and the home is still worth $400,000. LTV = 80.0%, equity = $80,000 (20.0%). They are right on the PMI cancellation line.
Example 2 — A market winner. A home purchased for $250,000 with $250,000 still owed (LTV was 100%) has since risen to $400,000. New LTV = 250,000 ÷ 400,000 = 62.5%, and equity has jumped to $150,000 (37.5%). That sudden cushion is what makes refinancing or a HELOC available.
Example 3 — High-leverage new purchase. A buyer finances $285,000 against a $300,000 home. LTV = 95.0%, equity = only $15,000 (5.0%). PMI is mandatory, and a small market dip could quickly put them underwater, owing more than the home is worth.
Example 4 — The jumbo cushion. On a $1,200,000 home with a $780,000 balance, LTV = 65.0% and equity = $420,000 (35.0%). Even high-dollar homes follow the exact same division — magnitude does not change the math.
FAQ
What is a good loan-to-value ratio?
Below 80% is the sweet spot: it typically removes private mortgage insurance and qualifies you for the lowest rates. Between 80% and 95% you have equity but may still carry PMI. Above 95% you are highly leveraged and should expect higher costs or approval hurdles. There is no formal cutoff, but 80% is the number lenders watch most.
How do I calculate my LTV myself?
Divide your remaining loan balance by the current home value, then multiply by 100. For example, $320,000 ÷ $400,000 = 0.80, or 80%. This calculator does the division for you and also reports your dollar equity.
When does PMI fall off my loan?
Under federal rules, lenders must automatically cancel PMI on a conventional loan when your LTV reaches 78% of the original home value. You can request cancellation at 80%. If your home has appreciated, enter the newer value here to see whether you have crossed either threshold.
Does LTV use the purchase price or current value?
It depends on purpose. At purchase, lenders use the lesser of purchase price or appraised value. For refinancing or PMI cancellation, they use a fresh appraisal of current market value. This calculator lets you type whichever value applies, so you can model both.
What LTV do I need to refinance?
For a standard rate-and-term refinance, most programs want 80% LTV or lower, though government-backed loans allow higher. For a cash-out refinance, lenders usually cap you at 80% combined LTV — the equity above that stays in the home.
What happens if my LTV is over 100%?
An LTV above 100% means you owe more than the home is worth — "underwater" or "upside down." This is common after a market crash or a low-down-purchase that has not built equity. Options are limited, but FHA streamline and HARP-style refinance programs were designed for exactly this situation.
Disclaimer
This loan-to-value calculator is provided for informational purposes only and does not constitute financial, lending, appraisal, or tax advice. LTV figures are based entirely on the home value and loan balance you enter; actual lender calculations use a licensed appraisal, the note date, and specific program guidelines. PMI thresholds and refinance limits vary by lender and loan type. Confirm your official ratio, equity position, and any cancellation or refinance options directly with your mortgage servicer or a licensed loan officer before acting.