How to calculate LTV
Divide what you owe on the mortgage by what the home is worth, then multiply by 100. The result tells a lender how much of the home's value it is lending against, and it decides whether you pay mortgage insurance, how much you can refinance and what some loans cost.
LTV = loan balance ÷ home value × 100$287,000 ÷ $350,000 × 100 = 82.0%
| Down payment | Starting LTV | On a $350,000 home |
|---|---|---|
| 3% | 97% | $339,500 loan |
| 5% | 95% | $332,500 loan |
| 10% | 90% | $315,000 loan |
| 15% | 85% | $297,500 loan |
| 20% | 80% | $280,000 loan |
| 25% | 75% | $262,500 loan |
When a home has more than one loan, add them: combined LTV (CLTV) counts every lien. HELOC limits are set on CLTV, which the HELOC LTV calculator covers; this page is about the first mortgage.
LTV thresholds that change what you pay
A handful of LTV levels trigger or end costs on the most common loans. On a conventional loan, PMI is generally required when you put down less than 20%,[1] and on an FHA loan the LTV at origination decides how long the annual premium lasts.[5]
| LTV | Loan type | What happens |
|---|---|---|
| 97% | Conventional (Fannie Mae) | Highest LTV in the eligibility matrix for a fixed-rate purchase, subject to its conditions |
| Above 95% | FHA, 30-year, base loan ≤ $726,200 | Annual MIP 0.55%, for the life of the loan |
| Above 90% to 95% | FHA, 30-year, base loan ≤ $726,200 | Annual MIP 0.50%, for the life of the loan |
| 90% or less | FHA, 30-year, base loan ≤ $726,200 | Annual MIP 0.50%, for 11 years |
| 80% | Conventional | You can ask the servicer to cancel PMI; maximum for a cash-out refinance |
| 78% | Conventional | PMI ends automatically on schedule if you are current |
FHA also charges an upfront premium of 1.75% of the base loan, whatever the LTV.[5] The 97% and 80% refinance figures are from Fannie Mae's matrix dated August 5, 2026.[6]
Removing PMI: 80%, 78% and the midpoint
Federal law gives three ways out of private mortgage insurance on a single-family principal residence, and all three are measured against the home's original value, not today's.[3][2] Original value means the lower of the sales price and the appraised value when the loan closed; for a refinance it is the appraisal the lender relied on.[4]
- 80%, on request. When the balance is scheduled to reach, or through extra payments actually reaches, 80% of original value, you can ask in writing to cancel PMI if you have a good payment history, are current, the value has not fallen below the original value and there is no second lien.[3]
- 78%, automatically. PMI must end on the date the balance is first scheduled to reach 78%, if you are current.[3]
- Midpoint. If neither has happened, the servicer must end PMI the month after the midpoint of the amortization schedule, 15 years into a 30-year loan.[2]
Example: a $350,000 purchase with $315,000 borrowed (90% LTV) at 7.11%, the 30-year average on Nov 12, 2026.[7] On the regular schedule the balance reaches 80% ($280,000) after 8 yr 6 mo and 78% ($273,000) after 9 yr 9 mo. Extra principal moves the 80% date forward; the extra payment calculator shows by how much.
| After | Balance | LTV |
|---|---|---|
| 1 yr | $311,867 | 89.1% |
| 3 yr | $304,895 | 87.1% |
| 5 yr | $296,860 | 84.8% |
| 7 yr | $287,602 | 82.2% |
| 8 yr 6 mo | $279,744 | 79.9% |
| 9 yr 9 mo | $272,526 | 77.9% |
| 15 yr | $234,149 | 66.9% |
LTV when you refinance
A new appraisal sets the value for a refinance, so rising prices can lower your LTV without any extra payments. For a Fannie Mae cash-out refinance of a one-unit principal residence the maximum is 80%; a limited cash-out (rate-and-term) refinance can go higher.[6] At 82.0% LTV this example has no room for cash out at 80%; the refi calculator works out whether a rate-and-term refinance pays for itself, and the mortgage payment calculator shows how PMI fits in the monthly payment.
Second loans countA HELOC or second mortgage does not change your first-mortgage LTV, but it raises CLTV, and the HPA conditions for cancelling PMI on request include having no subordinate lien. Paying down or closing the second loan can matter as much as the first.
Frequently asked questions
How do you calculate loan-to-value?
Divide the loan balance by the home's value. $287,000 ÷ $350,000 = 82.0%.
What is a good LTV ratio?
Does LTV use the purchase price or the appraisal?
For PMI cancellation, the original value is the lower of the sales price and the appraised value at closing.[4] For a new loan or refinance, the lender uses its own appraisal.
When does PMI come off?
How long do I pay FHA mortgage insurance?
For FHA case numbers endorsed from March 20, 2023, the annual premium lasts 11 years if your LTV at origination was 90% or less, and the life of the loan otherwise.[5]
Sources
- What is private mortgage insurance?
- When can I remove private mortgage insurance (PMI) from my loan?
- Homeowners Protection Act, 12 U.S.C. § 4902 (cancellation and termination of private mortgage insurance)
- Homeowners Protection Act, 12 U.S.C. § 4901 (definitions: original value, cancellation and termination dates)
- Mortgagee Letter 2023-05: Reduction of FHA Annual Mortgage Insurance Premium Rates
- Eligibility Matrix (Selling Guide)
- Primary Mortgage Market Survey (PMMS)