Enter the purchase price and down payment of a loan into the LTV Calculator. The LTV Calculator will display the LTV % and loan amount.
The following formula is used to calculate the LTV Ratio.
LTV = L / L+D * 100%
- Where LTV is the loan to value %
- L is the loan amount
- D is the down payment.
In other words, the purchase price is equal to the loan amount plus the down payment.
LTV is short for loan to value. A loan to value is a measure of the value of loan and the actual value of a product.
How to calculate LTV?
How to calculate LTV
- Determine the original loan amount
This will be the original purchase price of the item you wish to buy. For example, if a house costs 500,000 dollars the loan amount would also need to be $500,000.00.
- Determine your desired down payment
This will be the amount of money you wish to put “down” on the loan. In essence this amount will get subtracted from the loan. For mortgages a minimum of 10% is recommended.
- Calculate the LTV
Enter the purchase price and down payment into the formula to calculate the loan to value %.
LTV stand for loan to value. It is a ratio of the amount of a loan to the actual price of a good. For example, if a house costs 5$ and a down payment of 1$ is made, the LTV would be 80%.
That depends on what is being purchase. The lower the LTV the less the loan is compared to the purchase price. This will lead to lest interest paid over time.