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 — the lower your LTV, the more equity cushion you have, and the more confident a lender is in approving you for additional borrowing like a HELOC.
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. If you have any additional liens, lenders will use your CLTV, not your plain LTV, to assess HELOC eligibility.
What Counts as a "Good" LTV?
- Below 60%: Excellent — strong equity position, most lenders will approve favorable terms
- 60–80%: Good — within typical lender comfort zone for most HELOC products
- 80–90%: Borderline — some lenders approve here, often with a higher rate or stricter requirements
- Above 90%: Difficult — few lenders will extend a HELOC at this level
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 your maximum HELOC credit line.