Landlord Calculator

Loan-to-Value (LTV) Calculator

The number lenders quote constantly: how much of a property's value is covered by the loan, and how much is equity.

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What this calculator does

Loan-to-value (LTV) compares a loan amount to the value of the property securing it. It's the standard metric lenders use to gauge risk: a lower LTV means more equity in the deal and usually better loan terms, while a higher LTV means less cushion if values fall.

The formula

LTV = Loan Amount ÷ Property Value

Many lenders set maximum LTV thresholds, commonly 75-80% for investment properties, above which a loan won't be approved without additional requirements like mortgage insurance or a higher rate.

Worked example

$200,000 loan, $250,000 property value

Loan amount$200,000
Property value$250,000
Loan-to-value80.00%

An 80% LTV means 20% equity (here, $50,000) is in the deal, right at the threshold many investment-property loan programs use as their maximum.

What is a good loan-to-value ratio?

Loan-to-value (LTV) is the loan amount divided by the property's value, shown as a percentage. Lower LTV means more equity and less risk. For rental property, many lenders cap LTV around 75% to 80%, so you bring 20% to 25% as a down payment.

A lower LTV usually earns better loan terms and gives you a bigger cushion if values fall, while a higher LTV stretches your buying power but increases risk and cost. Track LTV over time, since paying down the loan and rising values both lower it.

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Frequently asked questions

Investment property loans typically cap loan-to-value around 75% to 80%, meaning you put down 20% to 25%. Limits vary by lender, loan program, and property type, and a lower LTV often comes with a better interest rate.
Two things lower LTV: paying down the loan balance and the property gaining value. A larger down payment lowers LTV at purchase. Over time, amortization and appreciation both reduce it, which can open the door to refinancing on better terms.
They are two sides of the same coin. LTV is the share of the property's value covered by the loan; equity is the share you own. An 80% LTV means 20% equity. As you pay down the loan or the value rises, LTV falls and equity grows.
Lenders set maximum LTVs for refinances, so you generally need enough equity to stay under the cap. A lower LTV not only qualifies you but often earns a better rate, which is why many owners wait until the balance drops or values rise before refinancing.