Loan-to-Value Ratio Calculator and Formula

This loan-to-value (LTV) calculator works out what percentage of a property’s value is represented by a loan. Enter the loan amount and the property value to get the LTV ratio as a percentage, plus the value not covered by the loan.

Formula

The loan-to-value ratio is the loan amount divided by the property value, multiplied by 100:

LTV (%) = (Loan amount ÷ Property value) × 100

• Loan amount is the amount being borrowed, in dollars.
• Property value is the value used for the calculation, in dollars. It must be greater than zero.
• LTV is the ratio, expressed as a percentage.
• Value minus loan amount is the arithmetic difference between the two dollar amounts. It is not necessarily the borrower’s equity, because other debts, costs, or ownership interests may affect that figure.

The calculator assumes both dollar inputs refer to the same property and currency. It does not determine which property value a lender will use, or calculate an application decision.

Worked Example

Using the calculator’s default values—loan amount $200,000 and property value $250,000:

1. Divide the loan by the property value: $200,000 ÷ $250,000 = 0.8.
2. Convert the decimal to a percentage: 0.8 × 100 = 80.00% LTV.
3. Subtract the loan amount from the property value: $250,000 − $200,000 = $50,000.

These results describe the two entered amounts only. The $50,000 difference is not a full estimate of sale proceeds or net equity.

What LTV Means

LTV describes the size of a loan relative to the value of the asset securing it, most often a home in mortgage discussions. A higher percentage means the loan represents a larger share of the stated property value; a lower percentage means it represents a smaller share. For example, an LTV of 80% means the loan equals four-fifths of the value used in the calculation.

LTV is a ratio, not an interest rate, monthly payment, or measure of income. It also does not show whether payments fit a borrower’s budget. Lenders may consider other information and use their own valuation and underwriting procedures. This calculator does not predict approval, loan terms, fees, or required insurance.

Which Property Value Should You Enter?

The result depends directly on the property-value figure. A purchase price, an estimated market value, and a lender’s appraisal are not automatically interchangeable. The relevant figure can depend on the loan and the lender’s process, so use the specific value required for the calculation you are making. If you are comparing scenarios, keep the valuation method consistent and label each estimate clearly.

For instance, a $200,000 loan divided by a $250,000 value gives 80% LTV. If the value entered were $240,000 instead, the same loan would produce about 83.33% LTV. The loan did not change; the ratio rose because the denominator was smaller. This is why an LTV estimate can change when a valuation changes, even if the outstanding loan balance stays the same.

How to Use the Result and Common Mistakes

Enter the loan amount being measured and the property value in matching units. For an existing loan, the relevant amount might be its current balance rather than its original principal, depending on the question. For a new loan, a calculation may use the proposed amount. Check which amount is appropriate before interpreting the result.

• Use consistent units: do not divide a dollar loan amount by a value stated in thousands of dollars without converting one of them.
• Do not enter zero as the property value: division by zero is undefined, so the calculator requires a positive value.
• Keep rounding until the end: calculate from the full inputs, then round the displayed percentage. Small differences can occur if you first round the ratio or the inputs.
• Distinguish a first mortgage from total borrowing: some questions concern one loan, while others may call for multiple loans secured by the property. Confirm what the requested LTV includes rather than assuming.
• Do not treat value minus loan as cash available: the simple subtraction omits transaction costs and any other claims or obligations.

Limits and Related Measures

This calculator is a simple arithmetic tool. It does not value a property, forecast changes in its value, calculate a payoff balance, include other secured loans, or apply a lender’s definition of LTV. If the loan amount exceeds the entered value, the formula correctly returns more than 100%; that result indicates the inputs produce a loan larger than the stated value, not that the calculation has failed.

LTV is sometimes discussed alongside combined loan-to-value (CLTV). In a general calculation, CLTV compares the total of multiple loans secured by a property with the property value. It is not the same as this calculator’s single loan-to-value calculation. Another related measure, loan-to-cost, compares borrowing with a project’s cost rather than a property’s value. The measures answer different questions, so use the one that matches the figures and definition requested.

Frequently Asked Questions

How do I calculate a loan-to-value ratio?
Divide the loan amount by the property value and multiply by 100. A $150,000 loan against a $200,000 value gives 75% LTV.

What does an 80% LTV mean?
It means the loan amount is 80% of the property value used in the calculation. It does not, by itself, indicate approval, a particular loan cost, or a required down payment.

Can LTV be over 100%?
Yes. If the loan amount is greater than the property value entered, the ratio exceeds 100%. Check that both figures are correct and that the calculation uses the intended loan amount and valuation.

Should I use the purchase price or appraisal value?
That depends on the purpose of the calculation and the lender’s method. Use the figure specified for the particular loan or comparison; the calculator cannot determine which valuation applies.

Is LTV the same as down payment percentage?
No. In a simplified purchase example with one loan and no other adjustments, the loan share and the amount paid toward the price may add to 100%. Actual transaction costs and loan structures mean the two should not be assumed to be exact opposites.

Assumptions

• The loan amount and property value use the same currency and refer to the same property.
• Property value is positive; the formula divides by that value.
• The calculation uses one loan amount and does not add other loans or fees.
• The value-minus-loan output is arithmetic only, not a net-equity or cash-proceeds estimate.

This result is an estimate based only on the figures entered; the lender’s disclosure gives the exact figures.

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in loan | Loan amount | $ | 200000 | 0 | 1000000000
in value | Property value | $ | 250000 | 0.01 | 1000000000
out ltv | Loan-to-value ratio | % | loan / value * 100 | 2
out diff | Value minus loan amount | $ | value - loan | 2