Loan to Value Ratio Formula: Loan To Value = Mortgage Amount / Property Value
Loan to Value Ratio Definition The Loan to Value Ratio Calculator is a financial calculator that will instantly calculate the loan to value (LTV) ratio of any property if you enter in the mortgage amount and the property value. The loan to value calculation is an important financial calculation that is done by homeowners and lenders to determine if the homeowners has enough equity in their home to qualify for certain mortgage interest rates (the higher the equity the better the interest rates) when refinancing. Enter the current appraised value or fair market value of the property in the property value field and then enter in the total mortgage amount on the property in the mortgage amount field to calculate the loan to value ratio. The lower the loan to value ratio then the better for the homeowner because the loan is generally considered less risky. The higher the loan to value ratio then the more risky a loan is considered to be.
How to Calculate Loan to Value Ratio Let's be honest - sometimes the best loan to value ratio calculator is the one that is easy to use and doesn't require us to even know what the loan to value ratio formula is in the first place! But if you want to know the exact formula for calculating loan to value ratio then please check out the "Formula" box above.