LTV Calculator - Loan to Value
This Loan to Value calculator (or LTV calculator for short) finds the proportion between the loan you need to take and the price of the purchased property. It can also determine the loan amount from the down payment and the LTV.
If you're interested in finances, you can take a look at our partially amortized load calculator. Otherwise, keep reading to learn:
- What is a loan-to-value ratio;
- How to calculate the Loan to Value ratio;
- How to use our loan-to-value ratio calculator.
What is a loan to value ratio?
Imagine that you want to buy a house. You can't afford it, though, unless you take a mortgage - the property costs $200,000. You have analyzed your finances and decided that you have $20,000 available for the down payment.
LTV describes the ratio between the loan amount and the total purchase price. It means that, in this case, you will have to follow the steps below.
Subtract the down payment from the total price to obtain the loan amount:
$200,000 - $20,000 = $180,000
Divide the loan by the total price:
$180,000 / $200,000 = 0.90
Finally, multiply this value by 100% to obtain LTV:
LTV = 0.90 * 100% = 90%
How to calculate the loan to value ratio? The loan to value ratio formula
This LTV calculator uses two simple formulas to determine the LTV of a transaction.
The two loan-to-value formulas are:
purchase price = down payment + loan
Intuitively, the total purchase price is the sum of the down payment (the sum of money you are able to pay from your account) and the loan that the bank lends to you.
LTV = loan / purchase price * 100%
As mentioned earlier, this LTV calculator defines the Loan to Value ratio as the loan divided by the purchase price, expressed as a percentage.
How to use our loan to value ratio calculator
You can use the calculator in multiple ways. For example, you can input the LTV and total property price and let this tool figure out the other two values.
Alternatively, you can input the loan amount and the LTV percentage, and our calculator will give you the purchase price and down payment.