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The size of your loan compared with the value of the property.
LTV is the loan balance divided by the property's value, expressed as a percentage. Lenders use it to gauge risk: a lower LTV (more equity) means better rates and no PMI, while a high LTV signals more risk. Reaching 80% LTV is the common threshold for dropping PMI.
A $320,000 loan on a $400,000 home is an 80% LTV.
Educational disclaimer: All content on WealthSerene.com is for educational purposes only and does not constitute investment advice. Projections and calculations are illustrative — actual results will vary based on market conditions, your specific situation, and many factors outside this tool’s scope. Always consult a qualified financial professional for advice specific to your situation. View full disclosures →