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
LTV at different down payments
| 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, 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 growing. A second loan on the same home is counted in the combined loan-to-value instead. Compare payments at each down payment in the mortgage payment calculator or read the down payment guide.
Sources
- US Census Bureau, American Community Survey 2024 1-year — Median value of owner-occupied homes (2024 ACS 1-year)
- CFPB — Ask your servicer to cancel PMI at this share of original value (Oct 28, 2026)
- CFPB — Minimum down payment on some conventional loans (Oct 28, 2026)
- Fannie Mae Eligibility Matrix — 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?
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.