How do I calculate loan-to-value?

Divide the loan by the value and express it as a percentage. The subtlety is what counts as the value: lenders use the lower of the purchase price and the appraised value, so on a purchase the price usually governs unless the appraisal comes in under it. On a refinance there is no price, so the appraisal governs alone — which is why a refinance depends far more heavily on the valuation than a purchase does.

What is a good loan-to-value ratio?

Eighty percent is the number that matters most, because at or below it conventional mortgage insurance is not required. Below that, pricing continues to improve down to sixty percent, after which further deposit stops buying better terms and is simply your own money tied up in a house. Above eighty the cost rises at each band. If you are close to a boundary, the last few thousand of deposit is worth far more than the rest of it.

Why does one dollar change my pricing band?

Because the ratio is rounded up rather than to the nearest whole number. A loan of exactly $400,000 on a $500,000 basis is 80.0000% and reports as 80%. Add a single dollar and it becomes 80.0002%, which reports as 81% and sits in the next band. That is not a rounding error, it is the rule — and it applies at every boundary. If you are aiming at a band, aim to be comfortably inside it rather than exactly on the line.

What happens if the appraisal comes in low?

The ratio is recalculated against the appraised figure and rises, without your loan changing at all. On the worked example, a valuation $30,000 under the contract moves the ratio from 81.20% to 86.38% and costs two pricing bands. Your options are to renegotiate the price, bring more cash to keep the loan proportionate, challenge the appraisal with better comparable sales, or walk away if the contract has an appraisal contingency. Lenders will not lend against a price the valuation does not support.

What is the difference between LTV, CLTV and HCLTV?

LTV counts the first mortgage only. CLTV adds any second mortgage and the balance drawn on a credit line. HCLTV adds the entire credit line whether drawn or not, on the reasoning that you could draw it tomorrow. The gap can be large: on the worked example the three are 81.20%, 89.20% and 98.20%. Lenders test all three against separate limits, and HCLTV is the one that surprises people, because an untouched line still counts in full.

What is the maximum LTV I can borrow at?

It depends on the programme. Conventional reaches 95% as standard and 97% under HomeReady or Home Possible, which carry income limits but waive price adjustments entirely. FHA goes to 96.5% with a credit score of 580 or above. VA and USDA lend the full price for eligible borrowers. Second homes cap around 90% and investment property at 75% for a single unit, which is the strictest of the lot and priced much more harshly at every band.

How do I lower my loan-to-value ratio?

Three ways, in descending order of reliability. Put down more cash, which works immediately and predictably. Pay the balance down, which works slowly at first because early payments are mostly interest. Or have the property appreciate, which works fast in a rising market and not at all otherwise. For an existing loan, note that a new appraisal is needed to have appreciation recognised, and the lender is not obliged to accept one.

Does LTV affect my interest rate or just approval?

Both, and the pricing effect lasts far longer than the approval one. Price adjustments are charged as a percentage of the loan, taken either as points at closing or built into the rate, and they compound with your credit score — a weaker score at a high ratio is penalised much more than either would be alone. That is why a small increase in deposit sometimes produces a surprisingly large improvement in the quote: it can move you a band on a grid where the steps are not evenly sized.

Is there any point going below 60% LTV?

Not for pricing. Sixty percent is the bottom band on the conventional grid, so a borrower at 45% is priced identically to one at 59%. Below that line the money is doing something else — reducing the interest you pay, giving you a smaller payment, or simply sitting in the house rather than earning elsewhere. Those may be good reasons, but they are not pricing reasons, and it is worth being clear about which motive you are acting on.

Do lenders use LTV for refinancing too?

Yes, and more strictly, because there is no purchase price to anchor the valuation. A rate and term refinance generally reaches 95% conventional, while a cash-out refinance is usually capped at 80% and priced considerably worse at every band. The appraisal is the whole story on a refinance: if it comes in lower than expected there is no negotiation available, only a smaller loan or a different product.

LTV Ratio Calculator

Loan-to-value is a simple division that other calculators on this site already perform. What makes it worth a page of its own is that lenders do not price it smoothly. They price it in bands, and the boundaries are unforgiving. The conventional tiers step at 60, 70, 75, 80, 85, 90, 95 and 97 percen...

THE NUMBERS

PURCHASE PRICE ($)

APPRAISED VALUE ($)

DEPOSIT (%) — $94,000, LEAVING A LOAN OF $406,000

YOUR LOAN-TO-VALUE

81.20%

$406,000 against a basis of $500,000, reported to the lender as 82% because the ratio is rounded up. That places you in the 80.01 to 85% band.

REPORTED

82%

BAND

85%

PMI

required

$6,000 more deposit would move you into the 80% band. Pricing steps at each boundary rather than sliding, so that last $6,000 is worth considerably more than the same amount spent anywhere else in the band. It also removes mortgage insurance, which is the largest single step of the eight.

Programme	Max LTV	You fit	Note
Conventional	95.0%	yes	the standard route, 5% down
HomeReady / Home Possible	97.0%	yes	income limits apply, and price adjustments are waived
FHA	96.5%	yes	3.5% down at 580 or above
VA	100.0%	yes	eligible service, nothing down
USDA	100.0%	yes	eligible rural areas, nothing down
Second home	90.0%	yes	not your main residence
Investment, one unit	75.0%	no	the strictest of the lot

Purchase price

$500,000

Appraised value

not entered

Basis, the lower of the two

$500,000

Deposit

$94,000

Loan

$406,000

LTV

81.20%

Reported to the lender

82%

Pricing band

85%

To the next band

$6,000

Room before the next band up

$19,000

CLTV

81.20%

HCLTV

81.20%

This is an estimate, not a quote. The bands here are the conventional pricing tiers, and the adjustment at each one depends on your credit score, the property type and the occupancy as well as the ratio — an investment property is priced far more harshly than a main residence at the same LTV. Price adjustments are waived entirely for some programmes, including HomeReady and certain first-time buyer files. Your Loan Estimate is the figure that counts.

THE BAND

Pricing steps at each line rather than sliding along. Two borrowers a hundred dollars apart in deposit can sit in different bands and pay measurably different rates for thirty years. It also means there is nothing to gain from being well inside a band — the money only works when it carries you across.

Live calculation · updates as you type

Created with❤️byeaglecalculator.com

HOW TO USE

1
Enter the purchase price, and the appraised value if you have it. If the appraisal is lower, that becomes the basis and the ratio is calculated against it rather than the price.
2
Set the deposit. The loan and the ratio follow, along with the band you land in and how far you are from the next one.
3
Read the distance to the next band. That figure is the only deposit money that changes your pricing — everything else within the band buys nothing.
4
If there is a second mortgage or a credit line on the property, open that section. The high combined ratio counts the undrawn portion, and it is the one people fail on unexpectedly.

FREQUENTLY ASKED QUESTIONS

RELATED CALCULATORS

PMI Calculator

Calculate instantly →

Monthly Mortgage Payment Calculator

Calculate instantly →

15 vs 30 Year Mortgage Calculator

Calculate instantly →

Closing Costs Calculator

Calculate instantly →

MORE MORTGAGE CALCULATORS

Monthly Mortgage Payment Calculator

Calculate instantly →

Mortgage Affordability Calculator

Calculate instantly →

Mortgage Refinance Calculator

Calculate instantly →

Rent vs Buy Calculator

Calculate instantly →

30-Year Mortgage Calculator

Calculate instantly →

Mortgage Amortization Schedule

Calculate instantly →

UK Stamp Duty Calculator (SDLT)

Calculate instantly →

Down Payment Calculator

Calculate instantly →

Australia Stamp Duty Calculator

Calculate instantly →

15 vs 30 Year Mortgage Calculator

Calculate instantly →

15-Year Mortgage Calculator

Calculate instantly →

PMI Calculator

Calculate instantly →

Reverse Mortgage Calculator

Calculate instantly →

FHA Loan Calculator

Calculate instantly →

Mortgage Points Calculator

Calculate instantly →

Biweekly Mortgage Payment Calculator

Calculate instantly →

Extra Mortgage Payment Calculator

Calculate instantly →

Mortgage Payoff Calculator

Calculate instantly →

Mortgage Comparison Calculator

Calculate instantly →

Was this calculator helpful?

Last updated: July 31, 2026 · Bands per the Fannie Mae price adjustment matrix · Estimate only, not a quote.