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Loan to Value Calculator
See how much of a property a loan really covers. Enter the appraised value and the loan amount, then press Calculate to get your LTV ratio, equity share and risk band.
Written by TopicDrill Editorial Team·Updated June 2026
Loan versus equity share of value
Loan Equity
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How the loan to value calculator works
The ratio is a single division: the loan amount over the appraised value of the property, turned into a percent. Whatever is left over is your equity, the slice you truly own. A loan that covers a smaller share of the value leaves you with more equity and a lower ratio, which lenders treat as safer.
The bar splits the property value into the loan portion and your equity portion, with a dashed line marking the eighty percent threshold. Watching where your ratio falls relative to that line shows at a glance whether mortgage insurance is likely.
A quick example
Say a home is appraised at 400,000 dollars and you borrow 320,000 dollars. Dividing gives a loan-to-value of eighty percent, leaving twenty percent or 80,000 dollars of equity. Sitting right on the eighty percent line, you are at the edge of where many lenders begin to require private mortgage insurance.
Things to keep in mind
The value here should be a lender's appraisal, which can differ from the price you paid or your own estimate. For the official view of mortgage insurance and equity, the Consumer Financial Protection Bureau explains the rules in plain language. To see the monthly payment behind a given loan size, try our home loan EMI calculator.
Frequently asked questions
What is the loan-to-value ratio?
The loan-to-value ratio compares the size of a loan to the appraised value of the asset securing it, shown as a percent. Divide the loan amount by the property value and multiply by one hundred. A loan of 320,000 dollars on a 400,000 dollar home is an eighty percent ratio.
Why do lenders care so much about LTV?
A lower ratio means more of your own money is at stake and the lender has a bigger cushion if they ever have to sell the property. That lower risk usually earns you a better interest rate. A high ratio leaves little margin, so lenders charge more or add insurance to cover the gap.
What is the eighty percent rule?
On a conventional US mortgage, crossing eighty percent loan-to-value usually triggers private mortgage insurance, an extra monthly cost that protects the lender rather than you. As you pay down the balance or the home appreciates, your ratio falls and that insurance can eventually be removed.
How do I lower my loan-to-value ratio?
You can lower it by making a larger down payment, putting extra toward the principal over time, or benefiting from a rise in the property value at reappraisal. Each of these shrinks the loan relative to the value, lifting your equity share and pushing you into a safer band.
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