Loan-to-value (LTV)
The loan amount divided by the home value, as a percentage. An LTV above 80% generally triggers private mortgage insurance.
What does loan-to-value mean?
Loan-to-value is the loan divided by the home value, expressed as a percentage, and it is one of the first numbers a lender checks. An LTV above 80% generally triggers private mortgage insurance and can nudge your rate higher, because the lender has less cushion if the loan goes bad. You lower LTV with a bigger down payment, by paying down principal, or as the home appreciates.
Frequently asked
How do I calculate loan-to-value?
Divide the loan amount by the home’s value (or purchase price, whichever is lower) and multiply by 100. A $240,000 loan on a $300,000 home is an 80% LTV.
A bigger down payment, principal paydown, or a higher home value all lower it.
What LTV do I need to avoid PMI?
80% or below, which means a down payment of at least 20%. Above 80% LTV a conventional loan generally requires private mortgage insurance until you pay the balance down — or the home appreciates — back to that 80% line.
Put it to use
All glossary terms Down Payment Calculator
Turn a down-payment percentage into dollars and see whether you clear the 20% PMI threshold.
Mortgage Calculator with PMI
Include private mortgage insurance in your payment and find out exactly when PMI drops off.
Home Equity Loan Calculator
Calculate the fixed monthly payment and total interest on a lump-sum home-equity loan.