What is the loan to value (LTV)?
The loan to value (LTV) is the amount of money a lender is willing to lend you in relation to the value of the home you’re purchasing or refinancing.
It’s calculated as a percentage. If a lender offers a mortgage with a maximum LTV of 80 percent, for example, that means they can lend you up to 80 percent of the property value. Mortgage LTVs typically range from 40% up to 90%.
Our LTV calculator is an easy and fast way for you to learn whether your loan-to-value ratio is within those limits.
What is Loan to Value Ratio (LVR)?
The Loan to Value Ratio (LVR) is a term used by lenders to describe how much money you’ll need to buy a home. It’s the amount you’ll need to borrow, expressed as a percentage of the ‘lender-assessed value’ of the house.
Let’s take a closer look at it. Consider the following scenario:
- Let’s assume the property is valued at $400,000 by your lender.
- Assume you have a $80,000 down payment.
- To purchase the house, you’ll need to borrow $320,000.
Your LVR would be calculated like this:
$320,000 ÷ $400,000 = 80%
Loan to Value (LTV) Calculator
The loan to value (LTV) is basically the size of the loan which a lender is willing to offer in relation to the value of the property it buys or redeems.
It is expressed as a percentage. So, for example, if a lender offers a mortgage deal which has a maximum 70% LTV, that means they will lend you up to 70% of the property value.
Mortgage LTVs typically range from 40% up to 80%.
LTV Ratio Formula
The Loan to Value Calculator uses the following formulas:
LTV ratio= ALTV = loan / purchase price * 100%PV/ MA