Calculate your Loan-to-Value (LTV) ratio by entering your loan amount and the property or vehicle value. You'll get your LTV percentage instantly, plus see how much equity you hold — helping you understand if you qualify for refinancing, avoid PMI, or assess your borrowing position.
Loan-to-Value (LTV) Ratio
--
Your Equity
--
Equity Percentage
--
LTV Assessment
--
The Loan-to-Value ratio is a comparison of your outstanding loan balance to the current market value of the asset (property or vehicle) used as collateral. It is expressed as a percentage. For example, a $200,000 loan on a $250,000 home gives an LTV of 80%.
The formula is simple: LTV = (Loan Amount ÷ Property Value) × 100. Divide your current loan balance by the appraised or market value of the asset, then multiply by 100 to express it as a percentage.
For mortgages, an LTV of 80% or below is generally considered good. It typically means you can avoid Private Mortgage Insurance (PMI) and may qualify for more competitive interest rates. Lenders view lower LTV ratios as lower risk.
For auto refinancing, lenders prefer an LTV under 100%, meaning the car is worth more than you owe. An LTV over 125% can make it significantly harder to qualify for a refinance loan, though some lenders may still work with you depending on your credit profile.
An LTV over 100% means you owe more on your loan than the asset is currently worth — this is known as negative equity, or being 'upside down' or 'underwater' on your loan. This situation can limit your refinancing options and may require you to pay down the balance before qualifying for a new loan.
LTV is a key risk metric for lenders. The higher the LTV, the more risk the lender takes on, since a lower equity cushion means less protection if the borrower defaults. A lower LTV signals a more financially stable borrower and often results in better loan terms and interest rates.
To reduce a high LTV, you can make extra payments to lower your loan balance, wait for property appreciation to increase the asset's value, or make a larger down payment if you haven't yet taken the loan. For mortgages, reaching an LTV of 80% allows you to request PMI cancellation.
If your mortgage LTV exceeds 80%, most conventional lenders require you to pay PMI, which protects the lender in case of default. Once your LTV drops to 80% or below — through payments or appreciation — you can typically request PMI removal, reducing your monthly costs.