What LTV is best for a first home?

It depends on your cash, the loan programs available in your country and the rate trade-offs. Lower LTV usually means better pricing and no mortgage insurance, but uses more of your savings, model both.

Combined Loan-to-Value: all loans secured on the property (first mortgage, HELOC, second lien) divided by value. Lenders assess risk on CLTV, not just the first lien.

Can LTV be over 100%?

Yes, when property values fall below the outstanding loan ('negative equity' or being 'underwater'). This calculator flags it because it signals a refinancing or sale problem.

Financing · Formula v1.0.0

LTV Calculator

Loan-to-Value ratio, equity and refinancing bands, the single number lenders anchor on for risk.

Currency (display only)

Your inputs

Loan amount

Property value

Loan-to-Value

80.0%

Equity 20.0%

Loan amount: $260,000
Property value: $325,000
Loan-to-Value (LTV): 80.0%
Owner equityValue − loan = 20.0% of the property: $65,000
Loan at 80% LTVA common conventional-lending ceiling in several markets: $260,000
Loan at 75% LTVTypical investment-property refinance band: $243,750
Additional borrowing to 80% LTV: $0

How the LTV works

Loan-to-Value expresses how leveraged a property is: the loan as a percentage of the property's value. 80% LTV means 20% of the value is equity cushion.

Lenders read LTV as risk, the lower the ratio, the more value stands between them and a loss if they must repossess and sell. That is why better LTVs usually come with better rates, and why very high LTV loans often require mortgage insurance.

For investors, LTV also frames refinancing: a cash-out refinance is typically limited to a program's maximum LTV, which is why the BRRRR strategy targets high (but lendable) loan-to-value bands.

Formula & terms

LTV = (Loan Amount ÷ Property Value) × 100 · Equity = Property Value − Loan Amount

Loan amount: Outstanding principal (or proposed loan) on the property.

Property value: Current market value or appraisal, depending on context.

Worked example

A $260,000 loan on a $325,000 property: LTV = 260,000 ÷ 325,000 = 80.0%, equity = $65,000.

At an 80% ceiling this loan is exactly at the edge; to reach 75% the loan could be at most $243,750.

If the property's value later rose to $360,000, the same loan would be 72.2% LTV, leverage falls as values rise.

Assumptions & limitations

•Static calculation on the values you enter; no amortization schedule or valuation uncertainty.

Formula reference

LTV = (Loan Amount ÷ Property Value) × 100 · Equity = Property Value − Loan Amount

Loan amount, Outstanding principal (or proposed loan) on the property.
Property value, Current market value or appraisal, depending on context.

Keep learning

Related glossary terms

ltv equity cltv refinance