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Loan-to-Value (LTV) compares mortgage amount to property value. Lower LTV = more equity = lower lender risk = better mortgage rates and no PMI at ≤ 80%.

Wzór

LTV = Mortgage amount / Property value × 100%; LTV > 80% = higher risk, typically requires PMI or higher rate

M: Mortgage amount (Currency)
V: Property appraised value (Currency)
LTV: Loan-to-value ratio (Percentage)

Przewodnik krok po kroku

1LTV = Loan / Property value × 100
2LTV ≤ 80%: no PMI, best rates
3LTV 80–90%: higher rates, likely PMI
4LTV > 95%: very limited lenders

Rozwiązane przykłady

Wejście

Loan $270k, property $300k

Wynik

LTV = 90% — higher rates and PMI likely required

Często zadawane pytania

What's a good LTV?

< 80% is traditional "safe"; gets best rates and no PMI. 80–95% has PMI or rate premium. > 95% rare and expensive. Lower LTV = lower lender risk = better terms for you.

How does appraisal affect my LTV?

Appraisal is critical. Buy $300k house with $60k down (20%). If appraisal comes in low ($280k), your LTV jumps to 71.4% ($240k loan). Low appraisal = lower offer negotiation.

Can LTV improve after purchase?

Yes, two ways: (1) Pay down principal. (2) Home appreciates, raising denominator. Home value up 5%, you've reduced LTV without paying anything extra.

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