What Is LTV and Why It Matters
Loan-to-Value (LTV) is the percentage of your home's value that's covered by debt. It's calculated as: Mortgage Balance ÷ Home Value × 100. Lenders use this figure to assess risk — a lower ratio generally indicates a larger equity cushion, but it does not guarantee approval for additional borrowing.
LTV vs. CLTV — What's the Difference?
LTV considers only your primary mortgage. CLTV (Combined Loan-to-Value) adds in any other debt secured against your home — a second mortgage, an existing HELOC, or any other lien — divided by your home's value. Lenders may examine CLTV when assessing additional secured borrowing. This calculator does not include any new HELOC amount you might request.
How to Interpret Your Ratio
Lower LTV or CLTV generally means more equity remains in the property. A ratio near or above 100% means existing secured debt is close to or greater than the estimated property value. No single ratio guarantees a HELOC: lenders set their own limits and consider proposed borrowing, credit, income and other requirements.
Using an inflated home value will give you an artificially low LTV. For accuracy, base your figure on a recent appraisal or a conservative estimate from a reputable home value tool, not just what you hope your home is worth.
Next Steps
Once you know your LTV, the natural next step is finding out exactly how much you could borrow. Try our Borrowing Power Calculator for an illustrative borrowing-capacity estimate.