Faro Labs / Tools / Loan-to-value calculator
Loan-to-value (LTV) calculator
The single number lenders check before anything else: how much of the property's value the loan actually covers. See your LTV, combined LTV with a second lien, and the equity behind it.
How LTV is calculated
CLTV = (all loan balances) ÷ property value
LTV is the flip side of your down payment or equity: the more you (or the market's appreciation) put in, the lower the loan needs to be relative to value. A 20% down purchase starts at 80% LTV; a cash-out refinance or second lien can push combined LTV higher even without a new purchase. Lenders use it as the primary risk gauge, because it's a direct measure of how much cushion exists before a forced sale would leave them short.
Common thresholds
80% is the line most conventional lenders use for PMI. Below it, none is required. Many cash-out refinances cap around 80% CLTV, and lenders get noticeably more conservative on rate and terms above 90% to 95%. Watching this number is how you know when refinancing, dropping PMI, or borrowing against equity actually becomes available.
LTV questions
What is loan-to-value (LTV)?
The loan balance divided by the property's value, expressed as a percentage. An 80% LTV means the loan covers 80 percent of the property's value and the owner's equity covers the rest. Lower LTV means more equity cushion and generally better loan terms and rates.
What is combined loan-to-value (CLTV)?
The same idea including every lien on the property, a first mortgage plus a HELOC or second mortgage, divided by value. Lenders evaluating a second lien or a refinance look at CLTV, not just the LTV of the loan they're considering on its own.
Why does LTV matter so much to lenders?
It's a direct measure of the lender's risk if they have to foreclose and sell. A high LTV leaves little room for selling costs and market softness before the lender takes a loss, which is why LTV drives PMI requirements, rate pricing, and refinance eligibility across nearly every loan product.
Every calculator
See LTV alongside cash flow and returns.
Faro's full underwrite tracks equity and leverage together over your holding period: paste a listing to see it.
Estimates for analysis and educational use only: not financial, investment, tax, or legal advice. Verify every number independently before making a purchase decision.