What is my loan-to-value ratio and do I need PMI? Find out instantly with our free calculator. Calculate your LTV percentage, combined LTV (CLTV) for second mortgages and HELOCs, home equity, down payment percentage, and exactly how much paydown you need to reach 80% LTV and drop PMI.
Here are three common scenarios worked out step by step using the exact formulas from this calculator.
Home value $300,000, first mortgage $240,000.
Down payment = 100 − 80 = 20% ($60,000). Equity = 20% ($60,000). At exactly 80% LTV, no PMI is required — this is the benchmark every home buyer aims for.
Home value $300,000, first mortgage $270,000.
Down payment = 10% ($30,000). Because LTV is above 80%, PMI is typically required. An additional paydown of $30,000 ($300,000 × 0.80 − $270,000) would bring you to 80% LTV.
Home value $300,000, first mortgage $240,000, HELOC $30,000.
First-mortgage LTV is 80%, but the combined LTV is 90%. Equity is only 10% ($30,000). Many lenders cap CLTV at 80-90% for HELOCs, so borrowing more may be limited.
Loan Amount = Outstanding balance of your first mortgage
Property Value = Current appraised value or purchase price
Loan 1 = First mortgage balance
Loan 2 = Second mortgage, HELOC, or other lien
| LTV | PMI Status | Impact |
|---|---|---|
| Above 80% | PMI typically required | Adds roughly 0.5%–1% of the loan amount per year. |
| Exactly 80% | No PMI | The threshold lenders use for standard pricing. |
| Below 80% | No PMI, better rates | Lower risk profile earns you better interest rates. |
PMI rules vary by lender and loan program. FHA loans use MIP (mortgage insurance premium) instead of PMI and follow different rules.
The calculator divides the loan balance by the property value and multiplies by 100 to get a percentage. It then derives the down payment percentage (100 − LTV), home equity, the paydown needed to reach the 80% LTV threshold, and applies the standard PMI guidance rule of thumb.
Get your exact loan-to-value ratio and combined LTV (CLTV) in seconds from just your property value and loan balances.
Instantly see whether PMI is typically required at your LTV and exactly how far you are from the 80% threshold.
Include a second loan or home equity line of credit to calculate your combined loan-to-value ratio.
See precisely how much additional paydown is needed to reach 80% LTV, drop PMI, and unlock better rates.
Your loan-to-value ratio compares the size of your mortgage to the appraised value of your home. It is calculated as the loan amount divided by the property value, expressed as a percentage. For example, a $240,000 mortgage on a $300,000 home produces an LTV of 80%. The remaining 20% — the part you own free and clear — is your home equity.
Lenders use LTV to measure risk: the more you borrow relative to the home's value, the riskier the loan. If you default and the lender must sell the home, a high-LTV loan leaves less cushion to cover the outstanding balance. That is why LTV drives three important things: whether you need PMI (almost always required above 80%), the interest rate you qualify for, and whether your loan is approved at all.
| LTV Range | What It Means |
|---|---|
| 80% or less | Strong position — no PMI, best rates, maximum equity cushion. |
| 80% to 90% | PMI typically required on conventional loans; rates still reasonable. |
| 90% to 97% | High LTV — PMI required, stricter underwriting, higher rates. |
| Above 100% | Underwater / negative equity — you owe more than the home is worth. |
If you have a second mortgage or a home equity line of credit (HELOC), lenders look at your combined loan-to-value (CLTV), which adds all loans against the property together. This matters because your total debt exposure — not just the first mortgage — determines how much equity you truly have and how much more you can borrow.
LTV = First Mortgage ÷ Property Value. It measures the risk of the primary loan and is the ratio used for PMI decisions on that loan.
CLTV = (First Mortgage + Second Loan) ÷ Property Value. Lenders typically cap CLTV at 80-90% for HELOCs and second mortgages.
Private Mortgage Insurance (PMI) protects the lender — not you — when you put down less than 20%. On a conventional loan with an LTV above 80%, PMI typically costs 0.5% to 1% of the loan amount per year, or about $100–$200 per month on a $240,000 loan. The good news: once your LTV reaches 80% through payments or appreciation, you can usually request cancellation, and it is removed automatically at 78% LTV under the Homeowners Protection Act.
Whether you are buying a home or already own one, lowering your LTV saves real money. The strategies below are the most effective ways to build equity and cross the 80% threshold.
On a $300,000 home with a $270,000 loan, PMI adds roughly $112–$225 per month. That is $1,350–$2,700 per year going to insurance that builds you no equity.
Paying down $30,000 to reach $240,000 on a $300,000 home eliminates PMI entirely, saves hundreds per month, and qualifies you for the lender's best rates.
Educational Purposes Only: This loan-to-value calculator is provided for educational and informational purposes only. Results are estimates based on the information you provide and standard industry formulas. PMI requirements, cancellation rules, and CLTV limits vary by lender, loan program, and investor guidelines (for example, FHA loans use mortgage insurance premiums rather than PMI). This tool does not constitute financial advice, loan approval, or a commitment to lend. Always consult a qualified mortgage professional before making financial decisions.