Your loan-to-value ratio is the first number every mortgage lender looks at. It tells them how much skin you have in the game—and it directly affects whether you'll pay hundreds extra each month for mortgage insurance, what interest rate you'll get offered, and sometimes whether you'll get approved at all.

Punch in your numbers above, and you'll know your LTV in seconds. Buying your first place? See exactly where you stand. Refinancing? Find out if your home's appreciation has put you in a better position than you realized. Sick of paying PMI? Check if you've finally crossed the threshold to request removal.

This one number shapes more of your mortgage costs than most buyers realize. Let's break down what it actually means.

LTV is the percentage of your home's value that you're borrowing. That's it.

The math: (Loan Amount ÷ Property Value) × 100 = LTV

Buying a $400,000 home with $80,000 down? You're borrowing $320,000, which is 80% of the home's value. Your LTV is 80%.

The remaining 20%? That's your equity. The slice of the home that's actually yours from day one.

Lenders obsess over this number because it answers their biggest worry: "If this person stops paying, can we sell the house and recover what we lent?" When you put down 20%, there's a nice cushion. When you put down 3%, the lender is exposed the moment home values dip even slightly.

Lower LTV = safer bet for the lender = better terms for you.

Here's what nobody tells you: about 60% of buyers put down less than 20%. If your LTV is 90% or 95%, you're not doing anything wrong. You're doing what most people do. The goal isn't to hit some magic number—it's to understand exactly what your number costs you, so there are no surprises at closing.

This is the big one, and it blindsides a lot of first-time buyers.

Cross above 80% LTV on a conventional loan, and lenders require you to buy PMI. Here's the kicker: this insurance protects them, not you. If you default, PMI pays the lender. You're just footing the bill.

How much? Typically 0.5% to 1.5% of your loan balance per year, broken into monthly payments. On a $300,000 mortgage, that's $125 to $375 added to your payment. Every month. Not going toward your principal. Not building equity. Just... gone.

But here's what you need to know: PMI has an expiration date.

Once your LTV hits 80%—through your payments, home appreciation, or both—you can formally request PMI removal. Write the letter. Make the call. Don't wait for your lender to notice, because they won't.

At 78% LTV, they're legally required to drop it automatically. Circle that date. Set a reminder. I've seen people pay PMI for years past when they qualified to remove it simply because they forgot to ask.

Lenders don't just approve or deny you—they price you based on risk. And LTV is a huge piece of that pricing.

Someone at 75% LTV might get quoted 6.75%. Someone at 95% LTV might see 7.125%. Same credit score. Same income. Same house. Different LTV, different rate.

A 0.375% rate difference sounds small. It's not. On a $350,000 loan over 30 years, that gap costs you roughly $28,000 in extra interest. Same house. Same borrower. Just a different down payment.

High LTV means higher risk. If the rest of your application is strong—good credit, low debt, stable income—lenders will work with 95% LTV all day.

But if you're borderline on credit or your debt-to-income is pushing limits, that high LTV becomes the thing that tips you from "approved" to "sorry, not right now."

Lower LTV gives you room to be imperfect somewhere else.

Three steps, ten seconds:

1. Enter your purchase price. What's the home selling for? (If you're refinancing, use your best estimate of current market value.)
2. Enter your down payment. What you're bringing to closing in cash. The calculator handles the loan amount math.
3. See your results. Your loan amount and LTV appear instantly.

Pro tip: Don't just calculate once. Play with it.

Bump your down payment up by $10,000. What happens to your LTV? Does it cross 80%? If not, does it get close enough that a year of appreciation might push you over?

Try a house that's $25,000 cheaper. How does that change things?

This is how you find the sweet spot—the combination of home price and down payment that gets you the best terms you can actually afford.

Not every mortgage program treats LTV the same way:

The FHA trap nobody explains: FHA sounds great—low down payment, flexible credit requirements. But read the fine print on mortgage insurance.

With conventional loans, PMI disappears at 80% LTV. With FHA, if you put down less than 10%, that mortgage insurance premium (MIP) stays on for the entire 30 years. You could have 50% equity and still be paying it.

I've watched people refinance out of FHA loans just to escape the permanent MIP. Sometimes FHA is still the right call—but know what you're signing up for.

The 80% threshold isn't arbitrary. It's the line between paying PMI and not paying PMI. And the dollars add up fast.

Let's make it real. You're buying a $350,000 home:

At 5% down, PMI alone costs you over $18,000 across five years. That's not touching your principal. That's not building wealth. That's pure expense.

So should everyone wait until they have 20%?

Not necessarily. Here's the math nobody does:

Say you can save $12,000 a year toward a down payment. At that rate, it takes roughly 3 more years to go from 10% down to 20% down on a $350,000 house.

But if home prices in your market climb 5% annually, that $350,000 house becomes a $405,000 house in three years. Now you need $81,000 for 20% down instead of $70,000—and you've spent three years paying rent instead of building equity.

Sometimes buying at 90% LTV and eating the PMI for a few years beats waiting. Sometimes it doesn't. Run your own numbers. The answer isn't the same for everyone.

Before you buy:

• Stretch your down payment. Even an extra $5,000 might cross a threshold that saves you real money. Ask family about gift funds—most loan programs allow them.
• Look at a slightly cheaper house. A $325,000 home with $35,000 down puts you at 89% LTV. That same $35,000 on a $300,000 home drops you to 88%. Small differences in price can shift your LTV more than small differences in down payment.
• Check down payment assistance programs. Seriously. Many states and cities offer grants or forgivable loans for first-time buyers. Free money exists—most people just don't look.

After you buy:

• Make extra principal payments. Even $100-200 extra per month accelerates your path to 80% LTV significantly. Some people throw bonuses or tax refunds at the principal once a year.
• Watch the calendar. Your lender is required to tell you the date when you're projected to hit 78% LTV based on your payment schedule. Know that date.
• Track your home's value. In a rising market, appreciation does the work for you. If you believe your home has gained significant value, you can request a new appraisal. If the numbers check out, you can petition for PMI removal even ahead of schedule.
• Don't wait for your lender to act. At 80% LTV, request removal in writing. At 78%, they must remove PMI automatically—but verify that they actually did. I've seen lenders "forget" and continue charging for months past the cutoff.

Refinancing flips the LTV calculation in your favor—if the market cooperated.

When you refinance, lenders don't care what you paid for the house. They care what it's worth now. They order an appraisal, get a current market value, and calculate your LTV from there.

Here's how that plays out:

Elena bought her townhouse in 2021 for $340,000 with 5% down.

• Her original loan: $323,000
• Her original LTV: 95%
• She paid PMI every month.

Three years later, she wants to refinance. Her townhouse appraises at $425,000. She's paid her balance down to $305,000.

• Current LTV: 72%

She went from 95% LTV to 72% LTV. No more PMI on the new loan. She qualifies for rates she couldn't touch when she bought. And she has $120,000 in equity she could tap if she wanted a cash-out refi for renovations.

The flip side: This only works if your home appreciated. If your home's value dropped—or just stayed flat—your LTV might be worse than you expect. In some cases, people find they're "underwater" (owing more than the home is worth) and can't refinance at all without bringing cash to closing.

Before you assume refinancing will save you money, get a realistic read on what your home would actually appraise for. Talk to a local agent. Look at recent comparable sales. Go in with eyes open.

The numbers you see here are estimates based on what you enter. For purchases, those inputs are usually solid. For refinancing, your actual LTV hinges on a professional appraisal—and appraisers can vary. The same home might appraise $20,000 higher or lower depending on who does the evaluation and what comparable sales they use.

Before making any major mortgage decisions, it's worth a conversation with a loan officer who can look at your full financial picture and give guidance tailored to your situation.