LTV Calculator

About the LTV Calculator

The loan-to-value ratio (LTV) calculator tells you exactly what percentage of a property's value is funded by debt versus equity — a single number that determines the interest rate you are offered, whether you need Lenders Mortgage Insurance, which lenders will consider your application, and how much financial buffer you have against a fall in property prices. LTV is calculated by dividing your loan amount by the property value and expressing the result as a percentage. A $480,000 loan on a $600,000 property gives an LTV of 80% — meaning 80% of the property is funded by debt and 20% by your own equity. This 80% threshold is arguably the most important number in Australian and UK mortgage markets: below 80% LTV, LMI/PMI is not required, the full range of lenders and products is available to you, and you typically qualify for the most competitive interest rates. Above 80% LTV, you enter a zone of increasing cost and decreasing lender options. In the Australian market specifically, the LMI premium grows significantly with LTV: a loan at 85% LTV attracts approximately 1.0% of the loan amount in LMI; at 90% LTV this rises to approximately 2.0%; at 95% LTV it reaches approximately 3.5% or higher. On a $500,000 loan at 95% LTV, the LMI premium is approximately $17,500 — which is typically capitalised into the loan and accrues interest over the 30-year term, adding $35,000–$40,000 in total cost. Lenders use LTV not only as a binary LMI trigger but as a continuous risk measure that influences pricing. Most major banks price mortgages in bands: below 60% LTV typically attracts the sharpest rates (0.3–0.5% discount versus standard); 60–70% and 70–80% are standard; above 80% carries a risk premium. The difference between a 6.0% rate and a 6.5% rate on a $500,000 loan is approximately $170/month — $61,000 over a 30-year term. For existing homeowners, the refinance mode of our calculator is equally useful. As property values rise and your loan balance falls through repayments, your LTV improves. Crossing below the 80% LTV threshold through either equity growth or loan reduction can unlock better refinancing rates and the ability to remove an existing LMI policy from your loan structure. Our calculator lets you enter your current property estimate and remaining balance to see your current LTV position and identify how far you are from the next pricing band. For investors purchasing additional properties, LTV management across a portfolio is a fundamental risk management strategy — lenders look at cross-collateralisation and total debt exposure, and portfolio LTV above 70–75% on average can restrict further borrowing even when individual properties appear serviceable.

How It Works

LTV = Loan Amount ÷ Property Value × 100. Equity = Property Value − Loan Amount. LMI applies when LTV > 80%. Estimated LMI: 85% LTV = ~1.0% of loan; 90% LTV = ~2.0%; 95% LTV = ~3.5%. Purchase mode: Loan = Property Price − Deposit. LTV = Loan ÷ Price × 100. Refinance mode: enter current estimated value and remaining balance directly. Example: $120,000 deposit on $600,000 home. Loan = $480,000. LTV = $480,000 ÷ $600,000 = 80%. No LMI required. To reduce to 70% LTV: need loan of $420,000 (extra $60,000 deposit or repayments). To reduce to 60% LTV: need loan of $360,000.

Tips & Best Practices

• ✓The 20% deposit threshold (80% LTV) is not just about avoiding LMI — it also unlocks meaningfully better interest rates and the full range of lender products. If you are at 81–82% LTV, the extra savings to cross 80% deliver a double benefit: LMI savings plus rate improvement.
• ✓LMI is paid once upfront (or capitalised into the loan) and does not give ongoing protection — it protects the lender, not you. If you later refinance to a different lender, you may need to pay LMI again at the new lender if your LTV is still above 80%.
• ✓Property price increases improve your LTV even without making extra repayments. A property purchased at 90% LTV that grows 5% per year will cross the 80% LTV threshold in approximately 3 years through capital growth alone (faster with regular repayments).
• ✓For investment properties, some lenders cap LVR at 80% from the outset — they will not lend at 90% LTV for investment purchases regardless of LMI availability. Check your lender's specific investment property policy before targeting a particular price.
• ✓Cross-collateralisation occurs when one lender holds multiple properties as security for all your loans. While this can simplify borrowing, it means the lender has a claim over multiple properties if you default on any one loan. Many investors prefer to use separate lenders for each property to avoid this.
• ✓Refinancing when your LTV has improved significantly can deliver substantial savings — but factor in break fees on fixed loans, discharge fees from your current lender, application fees at the new lender, and potentially new LMI if the new lender's LMI policy differs. A mortgage broker can model the total cost of switching.
• ✓UK mortgage markets use the same LTV concept with slightly different band pricing. UK lenders typically offer best rates at 60% LTV, with steps at 65%, 70%, 75%, 80%, 85%, 90%, and 95% — often with separate products at each band rather than the continuous rate adjustment seen in Australia.
• ✓The Home Equity Line of Credit (HELOC in US/CA) or redraw facility (AU) allows you to access equity built up as LTV falls — but drawing on this equity increases your LTV again. Carefully model the impact on your LTV and ensure future repayments remain comfortable.

Who Uses This Calculator

First home buyers checking whether their saved deposit crosses the 20% LTV threshold — and calculating exactly how much more they need to save to avoid LMI. Existing homeowners assessing refinancing eligibility after a period of price growth — a property purchased at 90% LTV 3 years ago may now be at 75% LTV due to combined price growth and repayments, unlocking better rates. Property investors monitoring portfolio LTV to assess further borrowing capacity and cross-collateralisation risk. Homeowners considering equity release or redraw to fund renovations or investments — they use the LTV calculator to ensure they stay within lender-accepted ratios. Mortgage brokers showing clients exactly how much extra deposit is needed to access a better rate tier or remove LMI from an application. People who purchased during a market peak and are concerned about negative equity — where the loan balance exceeds current property value — use the LTV calculator to track their position.