Understanding Loan-to-Value

Loan-to-value is one of the first numbers a lender calculates. It expresses your mortgage as a percentage of the property's value and directly determines whether you need private mortgage insurance, what interest rate you are offered, and how much equity you start with. This LTV calculator computes all of it instantly.

The 80% Rule

On a conventional loan, an LTV of 80% or less means no PMI. Put down 20% on a $400,000 home and your $320,000 loan sits exactly at the 80% line. Below 80% LTV you not only avoid PMI, you typically qualify for the lender's best rate tier — a double saving that can add up to tens of thousands of dollars over a 30-year term.

LTV Tiers at a Glance

Up to 60% LTV is considered excellent, 61–80% good, 81–90% fair, 91–95% high, and above 95% very high. The higher your tier, the more conservative lenders become and the more programs (like FHA at 96.5% or VA at 100%) matter as alternatives.