What LTV is required to avoid PMI?

Many US lenders allow PMI removal once your LTV falls below 80%, based on original or current value and subject to payment history and appraisal rules. Some loans also have automatic PMI cancellation at 78% LTV. Check your servicer’s policies and use this calculator to track your progress toward those thresholds.

Does this handle multiple loans?

Yes. To estimate combined LTV, add the balances of all loans secured by the property—first mortgage, second mortgage, HELOCs—and enter the total as the loan amount. The calculator will show combined LTV relative to the property value.

How often should I update property value?

Update property value whenever there is a significant market shift, you complete major renovations, or you obtain a new appraisal or broker price opinion. Using stale values can misstate your true LTV and your eligibility for certain loan programs or PMI removal.

Is lower always better?

In general, lower LTV means lower leverage and lower risk to the lender, which can translate into better rates and terms. Many products have maximum LTV caps for approval. However, some investors may choose moderate leverage intentionally to improve returns, so the “best” LTV depends on your risk tolerance and strategy.

Does this replace underwriting?

No. LTV is just one part of the underwriting picture. Lenders also evaluate credit scores, income, employment history, assets, reserves, debt-to-income ratios, property condition, and specific program requirements. Use this calculator as a quick reference, not as a guarantee of approval.

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Loan-to-Value (LTV) Calculator

Figure out the LTV ratio for mortgages, HELOCs, or equipment loans.

Results

Loan-to-value ratio: 75.00%
Equity remaining: 25.00%

Overview

Loan-to-value (LTV) tells you how much of an asset’s value is financed with debt versus how much is true equity. Lenders use LTV to set pricing, decide whether PMI or other mortgage insurance is required, and determine maximum borrowing limits. Investors use it to track leverage, refinance options, and risk across properties and portfolios.

This loan-to-value calculator turns simple numbers—loan balance and property value—into a clear LTV percentage and equity percentage. You can use it for mortgages, HELOCs, auto loans, equipment financing, or any situation where a loan is secured by a specific asset.

How to use this calculator

Enter the outstanding Loan amount you want to evaluate. For combined LTV, sum all loans secured by the property.
Enter the Property value you want to use—typically the current appraised value, purchase price, or a conservative market estimate.
The calculator divides loan amount by property value to compute LTV and subtracts LTV from 1 to compute Equity remaining.
Review the Loan-to-value ratio and Equity remaining outputs and compare them to lender thresholds, PMI rules, or your own risk guidelines.
Adjust loan amount or property value to test different scenarios, such as paying down principal, changes in market value, or cash-out refi amounts.

Inputs explained

Loan amount: The outstanding balance of the loan you are analyzing. For a house with multiple liens, you can add together the balances of the first mortgage, second mortgage, and HELOC to compute a combined LTV.
Property value: An estimate of the asset’s current value. For a home, this might be a recent appraisal, market analysis, or a conservative estimate of what it would sell for. For equipment or vehicles, use realistic resale or book value.

How it works

The basic LTV formula compares the loan balance to the asset’s value: LTV = Loan amount ÷ Property value.

We express LTV as a percentage so you can easily compare against common thresholds (for example, 80% for PMI removal or 75% for many cash‑out refi programs).

Equity percentage is the complement of LTV: Equity% = 1 − LTV. This represents how much of the asset’s value you own free and clear, as a percentage.

If you have multiple loans secured by the same property (such as a first mortgage plus a HELOC or second mortgage), you can combine their balances and treat them as a single loan amount for a "combined LTV" view.

Formula

LTV = Loan amount ÷ Property value\nEquity% = 1 − LTV\nExample: Loan = $300,000; Value = $400,000 → LTV = 0.75 (75%), Equity% = 25%

When to use it

Checking whether your mortgage or combined mortgage + HELOC balance is below 80% LTV for potential PMI removal or better refinance options.
Evaluating whether you have enough equity to qualify for a HELOC, cash-out refinance, or additional financing based on lender LTV caps.
Comparing leverage ratios across multiple properties or assets to understand which ones are more highly leveraged or offer more equity.
Stress-testing how changes in property value (up or down) or in loan balance (through paydown or additional borrowing) affect your LTV and equity percentage.
Providing a simple, visual metric when discussing risk levels, insurance requirements, or portfolio leverage with lenders, partners, or advisors.

Tips & cautions

For combined LTV, be sure to include all loans secured by the property—first mortgage, second mortgage, HELOCs, and any other liens—when entering the loan amount.
Use conservative property values, especially if the market is volatile. Overstating your property’s value will understate LTV and may give a false sense of security.
Many lenders have pricing tiers at specific LTV levels (for example, ≤60%, ≤70%, ≤80%, ≤90%). Use your calculated LTV to see which tier you fall into and how close you are to the next threshold.
When planning extra principal payments, model how much those payments would lower your loan balance and LTV, then re-run the calculator to see how quickly you can reach target thresholds.
If you are comparing multiple assets, keep your valuation methodology consistent (for example, all based on recent appraisals or all based on conservative market estimates).
Results are only as accurate as the property value and loan balance you enter; outdated appraisals or rough value estimates can skew LTV significantly.
Loan-to-value is just one underwriting factor. Lenders also consider credit, debt-to-income ratios, income stability, reserves, property type, and condition.
This calculator assumes a single asset and does not produce a portfolio-wide LTV by itself; for portfolios, calculate LTV per property and interpret results in context.
Does not account for future changes in property values, principal paydown, or additional borrowing over time; it is a snapshot at one point in time.
Does not incorporate mortgage insurance pricing nuances, loan-level pricing adjustments, or program-specific LTV limits; always verify details with your lender.

Worked examples

Example 1: $320k loan on $400k home

Loan amount = $320,000; property value = $400,000.
LTV = 320,000 ÷ 400,000 = 0.80 → 80%.
Equity% = 1 − 0.80 = 0.20 → 20% equity.
Interpretation: You are right at the common 80% LTV threshold, which may allow PMI removal or better refi pricing depending on lender rules.

Example 2: Combined LTV with HELOC

First mortgage balance = $250,000; HELOC balance = $50,000; combined loan amount = $300,000.
Property value (appraisal) = $500,000.
Combined LTV = 300,000 ÷ 500,000 = 0.60 → 60%.
Equity% = 40%. Many lenders view ≤60% LTV as relatively low-risk and may offer better rates or additional borrowing capacity.

Example 3: Planning extra payments to reach 80% LTV

Current loan amount = $350,000; property value = $400,000 → current LTV = 87.5%.
Target LTV = 80% → target loan amount = 0.80 × 400,000 = $320,000.
Principal reduction needed = 350,000 − 320,000 = $30,000.
You can use this gap, combined with an amortization or extra-payment calculator, to estimate how long it will take to reach 80% LTV with extra principal payments.

Deep dive

This loan-to-value calculator divides your loan balance by property value to show your current LTV and equity percentage. Enter the total loan amount (or combined liens) and a realistic property value to see where you stand.

Use it to check PMI removal thresholds, evaluate refinance or HELOC eligibility, and compare leverage across properties or equipment. Include all liens for combined LTV when you’re assessing borrowing room and risk.

FAQs

What LTV is required to avoid PMI?: Many US lenders allow PMI removal once your LTV falls below 80%, based on original or current value and subject to payment history and appraisal rules. Some loans also have automatic PMI cancellation at 78% LTV. Check your servicer’s policies and use this calculator to track your progress toward those thresholds.
Does this handle multiple loans?: Yes. To estimate combined LTV, add the balances of all loans secured by the property—first mortgage, second mortgage, HELOCs—and enter the total as the loan amount. The calculator will show combined LTV relative to the property value.
How often should I update property value?: Update property value whenever there is a significant market shift, you complete major renovations, or you obtain a new appraisal or broker price opinion. Using stale values can misstate your true LTV and your eligibility for certain loan programs or PMI removal.
Is lower always better?: In general, lower LTV means lower leverage and lower risk to the lender, which can translate into better rates and terms. Many products have maximum LTV caps for approval. However, some investors may choose moderate leverage intentionally to improve returns, so the “best” LTV depends on your risk tolerance and strategy.
Does this replace underwriting?: No. LTV is just one part of the underwriting picture. Lenders also evaluate credit scores, income, employment history, assets, reserves, debt-to-income ratios, property condition, and specific program requirements. Use this calculator as a quick reference, not as a guarantee of approval.

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This loan-to-value calculator provides a simplified snapshot of leverage based on user-entered loan balances and property values. It does not incorporate full underwriting criteria, PMI pricing details, or program-specific rules, and it should not be used as the sole basis for lending, refinancing, or investment decisions. Always verify LTV calculations, property values, and eligibility with your lender, appraiser, or financial professional before taking action.