Is LTV the same as equity?

They're inversely related. If LTV is 80%, your equity is 20%. Equity is the dollar amount you'd keep after a sale paid off the loan; LTV is the loan as a fraction of value.

Combined LTV — the sum of all loans secured by the property (first mortgage + HELOC + second mortgage) divided by value. Lenders also have CLTV caps when you stack borrowing.

Loan-to-value (LTV) ratio

Loan-to-value is one of the most important numbers in your mortgage. It changes whether you pay PMI, what rate you can get, and which loan programs you qualify for.

How LTV is calculated

LTV = loan_balance / property_value

Example:
  Home value: $500,000
  Loan:       $400,000
  LTV:        80%

Why LTV matters

PMI threshold — conventional loans require PMI when LTV is over 80%. Cancellation milestones are at 80% (by request) and 78% (automatic).
Rate pricing — many lenders charge LLPAs (loan-level price adjustments) at higher LTVs. A 95% LTV loan typically prices at a higher rate than a 75% LTV loan.
Refinance eligibility — most rate-and-term refinances are capped at 95%–97% LTV. Cash-out refinances are typically capped at 80%.
Loan program access — some jumbo and second-home programs require LTV under 75%–80%.

LTV at origination vs. today

The LTV you start with is set by your purchase price and down payment. Over time your LTV drops because you pay down principal AND because home values usually rise. Either lever — paying down or appreciation — can move you below the 80% threshold and let you cancel PMI or refinance into a better rate.

How to lower LTV faster

Larger down payment at purchase.
Extra principal payments throughout the loan.
Recast after a lump sum.
Documented home improvements that raise appraised value.
Order a fresh appraisal once values have appreciated (servicer rules apply).

Frequently asked

Is LTV the same as equity?: They're inversely related. If LTV is 80%, your equity is 20%. Equity is the dollar amount you'd keep after a sale paid off the loan; LTV is the loan as a fraction of value.
What's CLTV?: Combined LTV — the sum of all loans secured by the property (first mortgage + HELOC + second mortgage) divided by value. Lenders also have CLTV caps when you stack borrowing.

Estimates only. This calculator is not a loan offer, loan approval, official Loan Estimate, Closing Disclosure, tax advice, legal advice, or financial advice. Actual payments, rates, taxes, insurance, mortgage insurance, closing costs, and loan terms may vary. Contact a qualified lender, tax professional, or financial advisor for guidance.