Your loan-to-value ratio is the single most important number for equity borrowing. It determines what products you qualify for, what rate you pay, and whether PMI applies. Enter your numbers below to see where you stand.
SECTION B . LTV WORKSHEET
Form HEDC-B / 1003.02
Line 3 . LTV ratio
62.2%
Good
Line 4 . Equity
$170,000
37.8% owned
Line 5 . Owned share of value
Line 6 . What-if extra principal payment
Apply an additional lump-sum payment of $0 to see resulting LTV.
| LTV Range | Status | What It Means |
|---|---|---|
| Below 50% | Equity-rich | Best possible rates and terms. All products available. |
| 50-60% | Excellent | All products available at very competitive rates. |
| 60-75% | Good | Standard HELOC and HE loan access at solid rates. |
| 75-80% | Adequate | Approaching PMI removal threshold. Most products available. |
| 80-85% | Borderline | PMI still applies. Some equity products available at higher rates. |
| 85-90% | Limited | Few lenders, higher rates. Most equity products unavailable. |
| 90-95% | Very limited | Most equity products unavailable. Focus on building equity. |
| 95%+ | Minimal | Risk of going underwater if market dips. No equity products. |
Different mortgage and equity products have different LTV requirements. These are the standard maximum LTV ratios for each product type.
| Loan Type | Max LTV | Note |
|---|---|---|
| Conventional purchase | 97% | 3% down with PMI |
| FHA purchase | 96.5% | 3.5% down with MIP |
| VA purchase | 100% | No down payment required |
| Conventional refinance (no PMI) | 80% | 20% equity required |
| HELOC | 80-85% CLTV | Varies by lender |
| Home equity loan | 80-90% CLTV | Higher LTV = higher rate |
| Cash-out refinance | 80% | Stricter than rate-and-term refi |
Even small additional payments reduce your balance faster than the standard amortization schedule. $200 extra per month on a $300,000 mortgage at 7% shaves off 5+ years and saves tens of thousands in interest.
Home values generally appreciate 3-5% annually. On a $400,000 home, that adds $12,000-$20,000 in value per year, lowering your LTV without any extra payments.
If you believe your home has appreciated significantly since purchase or last appraisal, a new appraisal can officially lower your LTV. This is especially useful for PMI removal.
Targeted renovations increase your home's appraised value. Kitchen remodels (72% ROI), bathroom remodels (60% ROI), and garage door replacement (102% ROI) are among the best returns.
Below 80% is the standard threshold for good rates and broad product access. Below 60% is excellent and qualifies for the best available terms. Most lenders require a combined LTV (CLTV) of 80-85% or lower for HELOCs and home equity loans.
Lower LTV generally means lower rates because the lender has less risk. At below 60% LTV you might see rates 0.25-0.50% lower than at 80% LTV. Above 80%, rates climb more steeply and some products become unavailable.
LTV uses only your primary mortgage balance divided by home value. CLTV (combined loan-to-value) adds all liens: primary mortgage, second mortgage, HELOC balance, and any other secured debt against the property.
Four ways: make extra principal payments, wait for home appreciation, get a new appraisal if you believe your home is undervalued, or make value-adding improvements like a kitchen or bathroom renovation.
You need 80% LTV or lower (20% equity) to refinance a conventional mortgage without private mortgage insurance. FHA streamline refinances have different rules, and VA loans have no equity requirement.
Most lenders require at least 15-20% equity in your home, meaning an LTV of 80-85% or lower. Some credit unions go up to 90% CLTV, but rates will be significantly higher.
Schedule cross-reference
S-01HELOC for Investment Property
Interest tracing rules and how the 2026 OBBBA changes apply
S-02HELOC for Divorce Buyout
Preserve a low mortgage rate while funding the equity buyout
S-03HELOC for Bad Credit
Minimum scores by lender tier, rate premiums at each tier, and realistic paths if below 620
S-04HELOC for Home Renovation
The phase-draw advantage and the one tax-deductible use case
Form HEDC-1003 . Revised 2026-04-28 . Page rev. 4