80.0%
Standard range
0%80% threshold120%
Property Value
$500,000
Loan Balance
$400,000
Equity
$100,000 (20.0%)
Your LVR is below 80%. No PMI required. You have a 0.0% buffer before the PMI threshold.
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Used for projection only
Used for projection only
- What is LTV?
- LTV stands for Loan to Value Ratio. It measures how much of your property's value is financed by debt, expressed as a percentage. The higher your LTV, the more of the property the bank owns relative to you.
- In some countries LTV is called LVR (Loan to Value Ratio). The calculation is identical.
- Why does 80% matter so much?
- Lenders treat 80% as the dividing line between standard and high-risk loans. Above 80% LTV, most lenders require Private Mortgage Insurance (PMI), which protects the lender if you default. PMI typically costs 0.5% to 1.5% of your loan amount per year. On a $400,000 loan, that is $2,000 to $6,000 in additional annual cost until your LTV falls below 80%.
- Once your LTV reaches 80%, you can request PMI cancellation. By law, lenders must cancel it automatically at 78%. Requesting removal proactively at 80% can save months of PMI premiums.
- How LTV falls over time
- Two forces reduce your LTV every year: loan repayments (which reduce the numerator) and property appreciation (which increases the denominator). In the early years of a mortgage, appreciation typically does more work than repayments because most of each payment goes to interest rather than principal.
- Making additional principal payments accelerates LTV reduction and can bring you below the 80% threshold sooner, eliminating PMI and unlocking better refinancing options earlier.
Track LTV across all your properties
Calm Sea tracks LTV, equity, cashflow, and net worth across your entire portfolio in one view.