LTV Calculator

Loan to value ratio = loan amount ÷ property value × 100; equity amount = property value − loan amount; equity percent = 100 − loan to value ratio; maximum loan at the target ratio = property value × target ratio ÷ 100

Loan amount

The mortgage secured on the property, or the amount being applied for. It is the whole extension of credit against that value, so a second lien or a home equity line on the same property belongs in it — the two together are what the value is carrying, and a ratio built on the first mortgage alone understates the leverage.

Property value

The price being paid or the appraised value, depending on which question you are asking. A lender's appraiser sets it for an application and the answer is a fact about the file; a buyer comparing two offers uses the price, and the answer is a fact about the deal. The same loan against two values is two different ratios, and only one of them is the one the lender will use.

Target ratio

The loan to value ratio you would need to stay under, whether because a lender quoted it or because it is the line you set for yourself. It turns the calculation around: rather than measuring an existing loan, it asks how large a loan that value supports on your terms, which is the direction you need before you make an offer.

Loan to value ratio

The loan as a percentage of value, printed to two decimals. Higher means more borrowed against the same property, and therefore less room for the price to fall before the loan is under water. It is not a verdict on whether the borrowing is wise: the same ratio is cautious on one property and reckless on another, and this page has no field for the difference.

Equity amount

The part of the value that is not borrowed: value minus loan. It is a subtraction rather than a market estimate, so it goes negative when the loan exceeds the value — which is exactly what an under-water property looks like from this side of the table, and printing it that way is more useful than hiding it.

Equity percent

The same figure as a percentage, and deliberately the complement of the printed ratio rather than an independent division: the two always add to exactly 100, so a reader who has one never has to wonder which of two rounded numbers the panel used.

Maximum loan at the target ratio

The largest loan the value supports if you stay at your target: value times the target ratio. It converts the target from a constraint into a number you can take to a lender or an offer, and compared against the loan amount it says in one figure whether the deal you have in front of you fits the rule you set.

Use it before a mortgage application to see what a property would carry on the terms you want, and after one to check whether a quoted ratio matches the numbers you were given — quoting a ratio that does not follow from the price and the loan is common enough that the arithmetic is worth doing. It is also the right first screen when a value is uncertain: the ratio moves with the value, so seeing it at a few plausible values tells you how much the answer depends on an appraisal you have not had yet. The distinction that matters on this page is that a loan to value ratio is a measurement, not a compliance test. There is no threshold in it, and this page does not know whether the money is for a first home, a rental or a refinance; a given figure can be unremarkable on one loan and refused outright on another. If the question you actually have is how much cash you need at closing, that is the complementary side of the same ratio and the down payment page answers it directly. The four results here share two inputs, so none of them is independent of the others: move the value and the ratio, the equity, the equity percent and the maximum loan all move together.

1. The default: a 240,000 loan on a 300,000 property

   1. Ratio: 240,000 ÷ 300,000 = 0.8, so 80 percent
   2. Equity: 300,000 − 240,000 = 60,000
   3. Equity percent: 100 − 80 = 20 percent
   4. Maximum loan at the 80 percent target: 300,000 × 0.8 = 240,000

   The last line landing exactly on the loan amount is the useful coincidence in this example: an 80 percent loan on a value with an 80 percent target is right at the line rather than under it, with no headroom at all. Read the equity as the answer to the real question — 60,000 is what the property would have to lose, in cash terms, before the loan stops being covered.

2. A ninety percent loan: 360,000 on 400,000

   1. Ratio: 360,000 ÷ 400,000 = 90 percent
   2. Equity: 400,000 − 360,000 = 40,000
   3. Equity percent: 100 − 90 = 10 percent
   4. Maximum loan at the 80 percent target: 400,000 × 0.8 = 320,000

   Compare the loan against its own target here: 360,000 borrowed where the target allows 320,000, so the deal is 40,000 above the line. That comparison is the reason both figures are on the panel, and it is the one a seller is never going to do for you — the ratio of 90 percent is only alarming relative to something, and the maximum loan supplies that something.

3. An awkward ratio: 133,340 on 400,000

   1. Ratio: 133,340 ÷ 400,000 = 33.335 percent, printed as 33.34
   2. Equity: 400,000 − 133,340 = 266,660
   3. Equity percent: 100 − 33.34 = 66.66 percent
   4. Maximum loan at the 80 percent target: 400,000 × 0.8 = 320,000

   The equity percent is the complement of the printed ratio, not a second division, and this is the case where the difference shows: dividing 266,660 by 400,000 gives 66.665 percent, which on its own would print as 66.67, half a hundredth away from the 66.66 the panel shows. The complement was chosen so that the two percentages on the panel always add to exactly 100.

4. Borrowing more than the property is worth: 260,000 on 240,000

   1. Ratio: 260,000 ÷ 240,000 = 108.333 percent, printed as 108.33
   2. Equity: 240,000 − 260,000 = −20,000
   3. Equity percent: 100 − 108.33 = −8.33 percent
   4. Maximum loan at the 80 percent target: 240,000 × 0.8 = 192,000

   A ratio above 100 percent is not an error and the page does not treat it as one: it is what a property bought with nothing down and then fallen in value looks like, and the negative equity is the honest arithmetic. Nothing here is clamped, because the state it describes is real and a page that refused to print it would be hiding the case where the number matters most.

5. A low ratio and a lower target: 180,000 on 450,000, aiming at 75 percent

   1. Ratio: 180,000 ÷ 450,000 = 40 percent
   2. Equity: 450,000 − 180,000 = 270,000
   3. Equity percent: 100 − 40 = 60 percent
   4. Maximum loan at the 75 percent target: 450,000 × 0.75 = 337,500

   Here the target is looser than the actual deal: the value would support 337,500 but only 180,000 is borrowed, so the headroom is 157,500. A borrower in this position is not short of equity — the same figures are what a lender looks at for a home equity line, where the question stops being how much was borrowed and becomes how much more could be.

The value in this calculation is a single number standing in for a range. An appraisal is an opinion with a date on it, sale prices move, and an improvement or a bad year for the local market can shift the figure by more than the difference between one lending band and the next; the ratio is only as good as the value that went into it. The loan amount is taken as given, so anything that changes what is actually owed is invisible here — an interest-only period, a construction draw that has not been fully taken, or a second lien that will be opened later. Nothing about the borrower is in the page either, and in practice a lender weighs income, credit history, reserves and the property type alongside the ratio, sometimes declining a loan that passes on this measure alone. The regulatory treatment is deliberately absent: supervisory limits vary by loan category and by institution, they are floors for lenders rather than rights for borrowers, and the same ratio can be ordinary in one product and outside a guideline in another. Above all, the ratio says nothing about whether the price is a good one, which is a different question with a different page.

Is 80 percent a rule, or just a convention?

It is a convention rather than a rule, and the difference matters when you are told a loan cannot be made. The supervisory limits that appear in the lending standards for banks are set by category of real estate loan, and for improved property and for one-to-four family residential construction the figure is 85 percent, not 80. For permanent mortgages and home equity loans on an owner-occupied one-to-four family home the same standards establish no limit at all, and instead require credit enhancement such as mortgage insurance where the ratio reaches 90 percent at origination. What borrowers meet as 80 percent is a market convention layered on top by lenders, insurers and the agencies that buy loans, and it changes with the product, the property and the borrower.

Which value should I use, the price or the appraisal?

For a lender's decision, the appraisal, because that is the figure the analysis will run on and the one written into the file. For your own comparison between two properties or two offers, the price, because that is what you would actually pay and what your equity would actually be. The two can differ, and when they do the smaller one governs how much can be borrowed — an appraisal below the agreed price means the same loan produces a higher ratio, and the difference has to come from somewhere: more cash, a lower price, or no deal.

Does a second mortgage count in the ratio?

It counts in the sense that both loans are secured on the same property and the value is carrying the two together, which is why the lending standards say the total amount of all senior liens should be included when the ratio is worked out. What different lenders do with that instruction varies, and it is normal to see a first mortgage ratio quoted on its own for a purchase and a combined ratio quoted when a home equity line is added. The arithmetic on this page is the combined version: put the whole extension of credit in the loan field, or you will be measuring less than the property is actually carrying.

What does the maximum loan figure add?

It turns the target from a constraint into an amount. A ratio tells you whether a deal fits; a maximum loan amount tells you the largest deal that would fit, which is the number you need when you are the one choosing a price or a down payment. Comparing it with the loan amount is the fastest version of the whole calculation: above it and the loan does not meet your target, below it and you have headroom, equal and you are exactly on the line.

Does the ratio change after the loan is made?

The ratio written at origination does not change, because the loan and the value at that moment are fixed facts. What changes is the property value, and the ratio recomputed against a current value is a different measure with a different name — the mark-to-market version. That recomputed figure is what matters if you are considering a refinance or if the property has to be sold, and it is deliberately not the figure this page prints: mixing the two produces a number that belongs to no moment in particular.

How much equity do I need for the loan to be safe?

There is no equity level that makes a loan safe on its own, which is the honest answer and also the reason the page has no threshold in it. Equity is the cushion against a fall in value, so more of it is better protection against that one risk, but it says nothing about whether the borrower can keep paying, what the property will be worth in five years, or what it costs to sell. Read the ratio as one measurement among several rather than as a rating, and treat a high one as a question to ask rather than a conclusion.

• 12 CFR Part 34, Real Estate Lending and Appraisals, Appendix A to Subpart D — defines loan-to-value ratio, fixes it at the time of loan origination, requires senior liens to be included, and sets the supervisory loan-to-value limits by category of real estate loan — Electronic Code of Federal Regulations (eCFR), U.S. Government Publishing Office (United States)
• 12 CFR 1240.34, Multifamily mortgage exposures — the mark-to-market treatment, where the same loan is re-measured against the current value of the property rather than the value at origination — Electronic Code of Federal Regulations (eCFR), U.S. Government Publishing Office (United States)
• Publication 936 (2025), Home Mortgage Interest Deduction — how a loan secured by a home is split between acquisition debt and home equity debt, which is the distinction that decides what a second loan against the same property is — Internal Revenue Service (United States)