# Loan-to-value ratio (LTV)

> Loan-to-value ratio compares your loan amount with the home’s value. How to calculate LTV and why it decides mortgage insurance, pricing and limits.

URL: https://mortgage-math-us.com/glossary/loan-to-value-ratio/  
Last reviewed: 2026-10-29 · By the MortgageMath US Editorial team

## Quick answer

The **loan-to-value ratio (LTV)** is your mortgage amount divided by the home’s value, shown as a percentage; on a purchase, lenders use the lower of the price and the appraised value. A bigger down payment means a lower LTV, which affects whether you qualify, your rate and whether you pay mortgage insurance.

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| Fannie Mae maximum, one-unit purchase | 97% | [Fannie Mae Eligibility Matrix](https://singlefamily.fanniemae.com/media/20786/display) | Apr 1, 2026 |
| You can ask to cancel PMI at this LTV (original value) | 80% | [CFPB](https://www.consumerfinance.gov/ask-cfpb/when-can-i-remove-private-mortgage-insurance-pmi-from-my-loan-en-202/) | Oct 28, 2026 |
| Lowest conventional down payment | 3% | [CFPB](https://www.consumerfinance.gov/owning-a-home/prepare/figure-out-how-much-you-want-to-spend/) | Oct 28, 2026 |

## LTV at different down payments

*A $360,000 purchase*

| Down payment | Loan | LTV | Conventional mortgage insurance? |
|---|---|---|---|
| 3% | $349,200 | 97% | Yes |
| 10% | $324,000 | 90% | Yes |
| 20% | $288,000 | 80% | No |

The formula is simply loan ÷ value × 100. Fannie Mae’s maximum on a one-unit home you’ll live in is 97%, the flip side of the 3% minimum down payment on some conventional loans.

## Why the line at 80% matters

Above 80% LTV, a conventional loan generally needs [private mortgage insurance](https://mortgage-math-us.com/glossary/private-mortgage-insurance/), and you can ask your servicer to cancel it once the balance reaches 80% of the original value. After closing, LTV falls as you pay down principal or as the home gains value, which is your [home equity](https://mortgage-math-us.com/glossary/home-equity/) growing. A second loan on the same home is counted in the [combined loan-to-value](https://mortgage-math-us.com/glossary/combined-loan-to-value/) instead. Compare payments at each down payment in the [mortgage payment calculator](https://mortgage-math-us.com/tools/mortgage-payment-calculator/) or read the [down payment guide](https://mortgage-math-us.com/buying/down-payment/).

## Sources

- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25077?g=010XX00US) — Median value of owner-occupied homes (2024 ACS 1-year)
- [CFPB](https://www.consumerfinance.gov/ask-cfpb/when-can-i-remove-private-mortgage-insurance-pmi-from-my-loan-en-202/) — Ask your servicer to cancel PMI at this share of original value (Oct 28, 2026)
- [CFPB](https://www.consumerfinance.gov/owning-a-home/prepare/figure-out-how-much-you-want-to-spend/) — Minimum down payment on some conventional loans (Oct 28, 2026)
- [Fannie Mae Eligibility Matrix](https://singlefamily.fanniemae.com/media/20786/display) — Fannie Mae maximum LTV, one-unit principal residence purchase (Apr 1, 2026)
- [CFPB: What is a loan-to-value ratio and how does it relate to my costs?](https://www.consumerfinance.gov/ask-cfpb/what-is-a-loan-to-value-ratio-and-how-does-it-relate-to-my-costs-en-121/)

_General information, not financial advice._