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LTV Calculator

LTV Calculator

Use the LTV Calculator to Evaluate Your Financing Options

The Loan-to-Value (LTV) ratio is a key concept in real estate financing, it’s the percentage of the property value that’s financed through a loan. It’s important for both lenders and borrowers, affects loan eligibility, interest rates and mortgage insurance requirements.

Our LTV Calculator is a simple tool to calculate your LTV in seconds. Use it to decide to buy, refinance or tap into your property equity.

Why LTV Matters in Real Estate

  • Loan Approval: Lenders use LTV to assess risk and decide loan eligibility.
  • Interest Rates: Higher LTV means higher interest rates due to higher risk.
  • Mortgage Insurance: Loans with LTV above certain thresholds may require private mortgage insurance (PMI).

LTV Interpretation

  • LTV ≤ 80%: Lenders love it; may get better interest rates and terms.
  • LTV > 80%: Higher risk; may require mortgage insurance and higher interest rates.
  • LTV > 100%: Loan amount is more than property value; hard to get financing.

How to Lower Your LTV

  • Increase Down Payment: Lowering the loan amount lowers the LTV.
  • Improve Property Value: Renovations or upgrades can increase the appraised value.
  • Pay Down Existing Loans: Paying off outstanding loans decreases the LTV.

Using the LTV Calculator for Planning

  • Purchase Decisions: See how different down payment amounts affect your LTV.
  • Refinancing Options: Check if you can refinance based on your current LTV.
  • Equity Management: How much equity do you have for cash-out refinancing.

Low LTV Benefits

  • Better Loan Terms: Lower interest rates and better loan conditions.
  • No Mortgage Insurance: Potentially eliminate PMI and lower monthly payments.
  • More Equity: More ownership in the property = more financial security.