Loan-to-Value Calculator

What is loan-to-value?

Loan-to-value, or LTV, compares a mortgage balance with the value of the property securing it. The loan-to-value calculator expresses that comparison as a percentage. The formula is LTV = loan / value.

For this calculator, LTV uses your first mortgage balance. Combined loan-to-value, or CLTV, includes that balance and other liens on the property. A lien is a debt secured by your home, such as another mortgage or a home equity line of credit. CLTV = total liens / value. A higher percentage means the debts secured by the home represent a larger share of its estimated value.

Why loan-to-value matters

Lenders may use LTV and CLTV when reviewing a home purchase, refinance or HELOC application. The ratios can affect whether a lender approves a loan and the terms it offers. A lower ratio may support your application, but it does not guarantee approval or a particular rate. Lenders consider other details too, including credit, income, property and loan type.

Your ratios also help you understand how much of your home’s value is not already tied to debt. That can inform whether to seek a refinance, consider borrowing against your equity, or keep paying down the mortgage before applying. A calculator estimate is not a lender’s appraisal or approval decision.

How to use this loan-to-value calculator

1. Enter the home value you want to use. For a purchase, this may be the agreed price; for a refinance or HELOC, use a current estimate or the value supplied for your application. A lender may use a different appraised value.
2. Enter the outstanding balance of the first mortgage, not the original amount borrowed. Check a recent mortgage statement or contact your servicer if you need the current payoff balance.
3. Enter the balances of other liens secured by the home. Include debts such as a second mortgage or HELOC. If there are no other liens, enter 0.
4. Review LTV, combined LTV and equity. The calculator also shows the loan amount that would equal 80% LTV based on the home value you entered. Treat that as a calculation, not a promise that you can borrow that amount.

Loan-to-value calculator example

How to read your LTV results

LTV shows the first mortgage balance as a share of the home value you entered. Combined LTV shows all entered liens as a share of that value. If the two figures differ, other liens account for the difference. If they match, the entered other liens do not change the combined calculation.

Equity is the home value minus the mortgage and other liens entered. It is an estimate based on your inputs, not cash you can automatically access. The loan amount for 80% LTV is the total debt that would equal that share of the entered home value. It is not an additional amount to borrow: subtract existing liens to estimate the amount of room below that level, if any. A lender may use different valuation methods and eligibility requirements.

How to improve your LTV

1. 01

   Pay down mortgage principal

   Making extra principal payments can reduce the balance used in the calculation. Check your loan terms and confirm that extra payments will be applied to principal.

2. 02

   Reduce other liens

   Paying down a second mortgage or HELOC can lower combined LTV. Ask the creditor for the current payoff amount and make sure the lien is released when the debt is paid.

3. 03

   Bring more money to a purchase

   A larger down payment reduces the amount you need to borrow compared with the purchase value. Keep enough cash available for closing costs and other needs before deciding how much to put down.

4. 04

   Check the property value used

   Use a supportable current estimate and review the lender’s valuation if you are applying. If you believe an appraisal missed relevant property details, ask the lender how to submit accurate information for review. Do not rely on an unsupported value to plan a loan.

Common LTV calculator mistakes

• Using the original loan amount

  LTV should reflect the current mortgage balance, not the amount you borrowed at closing. Use a recent statement or request a payoff figure when accuracy matters.

• Leaving out other liens

  A first mortgage alone does not show combined LTV if a second mortgage or HELOC is also secured by the property. Include those balances to see the full picture.

• Treating an estimate as an offer

  The calculator’s equity and borrowing-room figures depend on the value and balances you enter. A lender decides what value and debts to use and whether you qualify.

• Confusing equity with available cash

  Equity is a difference between estimated home value and debt. Accessing it may require a new loan, an appraisal, lender approval and costs.

The loan-to-value formula

Key terms

Loan-to-value (LTV)

The first mortgage balance divided by the home value, expressed as a percentage.

Combined loan-to-value (CLTV)

The total of the mortgage and other liens divided by the home value, expressed as a percentage.

Lien

A legal claim against property that secures a debt.

Equity

The home value used in the calculation minus the mortgage balance and other liens entered.