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.