What is a good LTV ratio for a mortgage?

An LTV of 80% or below is considered strong — it means you have at least 20% equity, so you avoid PMI and typically get the best rates. Ratios between 80% and 96.5% are still acceptable but usually require PMI or an FHA loan.

How do I calculate LTV?

LTV = (Loan Amount / Property Value) × 100. For example, a $240,000 loan on a $300,000 property gives an LTV of 80%.

Does a higher LTV mean a higher interest rate?

Generally yes. Lenders charge higher rates for higher-LTV loans because there is less equity cushion if the borrower defaults. An LTV above 80% also triggers PMI costs.

When can I remove PMI?

Under federal law (Homeowners Protection Act), lenders must cancel PMI when your LTV reaches 78% based on the original value, or you can request cancellation at 80% LTV. Refinancing at a lower LTV also eliminates PMI.

What is the maximum LTV for an FHA loan?

FHA loans allow a maximum LTV of 96.5% (minimum 3.5% down payment) for borrowers with a credit score of 580 or higher. With a score of 500–579 the maximum LTV is 90%.

Yes — this is called being "underwater" or having negative equity. It happens when property values fall after purchase. Most lenders will not approve a new loan above 100% LTV.

Loan-to-Value Calculator

Name: Loan-to-Value Calculator
Availability: InStock
Author: Nham Vu

Enter your loan amount and property value to calculate LTV ratio and see whether you need PMI.

Loan Details

Loan Amount ($)

Property Value ($)

Quick Examples

Enter loan details on the left and click Calculate.

LTV Threshold Reference

LTV Range	Loan Type	PMI Required?
≤ 80%	Conventional — best rates	No
80.01% – 90%	Conventional — standard	Yes
90.01% – 95%	Conventional — higher PMI	Yes
95.01% – 96.5%	FHA loan eligible	Yes (MIP)
96.51% – 97%	Conventional 97 (Fannie/Freddie)	Yes
> 97%	VA / USDA only (eligible borrowers)	Funding fee
> 100%	Underwater — most lenders decline	N/A

Summary