GenzeeLoan-to-Value (LTV) Calculator
Calculate your loan-to-value ratio from a property's value and loan amount — a key number lenders use to price and approve mortgages.
Loan-to-value ratio
80.0%
Typically favourable terms
What LTV measures
Loan-to-value is the loan amount expressed as a percentage of the property's value — an 80% LTV means the loan covers 80% of the property's value, with the remaining 20% coming from the buyer's down payment. It's one of the primary numbers lenders use to assess risk on a mortgage.
Why lower LTV usually means better terms
A lower LTV means the buyer has more equity in the property from day one, which reduces the lender's risk if the borrower defaults and the property needs to be sold. Lenders commonly offer better interest rates at lower LTV bands, and many require additional mortgage insurance above certain thresholds (80% or 90% are common cutoffs) specifically to offset the higher risk of a smaller down payment.
Why this number matters beyond loan approval
LTV isn't only relevant when first taking out a mortgage — refinancing, requesting removal of mortgage insurance, or taking out a second loan against the same property (like a home equity loan) all typically depend on the current LTV, recalculated against the property's present value rather than its original purchase price.
Frequently asked questions
What LTV do I need to avoid mortgage insurance?
This varies by lender and country, but 80% or lower is a commonly cited threshold. Confirm your specific lender's policy, since thresholds and insurance requirements differ.
Can LTV change after I take out the mortgage?
Yes — as you pay down the loan and/or the property's market value changes, your LTV recalculates. Rising property values can lower your effective LTV even without extra payments, which is why some borrowers request an LTV reassessment to remove mortgage insurance early.
Is a higher down payment always better?
A lower LTV generally means better loan terms and lower risk, but it also ties up more cash in the property. Whether maximizing the down payment is the right choice depends on what else that cash could otherwise be used for, including its opportunity cost.