Financial glossary
Loan-to-Value Ratio (LTV)
In plain English
The mortgage balance divided by the property value, expressed as a percentage and used in pricing and mortgage-insurance decisions.
Loan-to-value ratio (LTV)
Loan-to-value divides the mortgage balance by the property value. A $360,000 loan on a $400,000 home begins at 90% LTV. The down payment supplies the other 10%.
Lenders use LTV when evaluating risk, pricing loans, and determining whether mortgage insurance may be required. Scheduled principal payments reduce LTV against the original value. Appreciation can also reduce current LTV, but a lender may require a new valuation before recognizing it.
The down payment and PMI calculator estimates when scheduled principal reaches 80% of the original home price. Actual cancellation rights, automatic termination, seasoning, payment history, and appraisal rules depend on the loan and applicable law.
Related calculators
- Down Payment & PMI CalculatorEstimate cash down, starting loan-to-value, monthly PMI, total PMI, and when scheduled mortgage principal may reach 80% LTV.
- Mortgage CalculatorEstimate a complete monthly mortgage payment with principal, interest, property tax, insurance, PMI, and HOA dues. See total interest and loan cost.
- Refinance CalculatorSee if refinancing pays off: new payment, monthly savings, break-even point on closing costs, and lifetime interest compared with your current loan.