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LTV & PMI Calculator

Calculate your loan-to-value ratio, estimate PMI costs, and see exactly when your mortgage insurance will drop off.

LTV & CLTV
PMI Estimates
Auto-Cancel Timeline

Calculate Your LTV Ratio

Enter your property value and down payment to see your LTV ratio and PMI estimate.

0%3.5% FHA20% No PMI50%

HELOC or second mortgage for CLTV calculation

LTV Ratio

90.0%

Loan Amount

$360K

PMI required until LTV reaches 78%

Estimated PMI Cost (Conventional)

0.55%

Annual Rate

$165

Per Month

$1980

Per Year

Auto-cancels at 78% LTV (~10 years / 109 months)

Total PMI Cost Until Auto-Cancel

$17,985

109 months x $165/mo

FHA MIP vs. Conventional PMI Comparison

At your current LTV of 90.0%, here's how FHA and conventional mortgage insurance compare.

FeatureConventional PMIFHA MIP
Upfront Cost$0$6,300 (1.75%)
Annual Rate0.55%0.50%
Monthly Cost$165/mo$150/mo
Removable?Yes, at 78-80% LTVNo (life of loan if <10% down)
Min. Down Payment3%3.5%

LTV Paydown Over Time

See how your LTV decreases as you make payments. PMI auto-cancels at the 78% line.

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80% PMI threshold
78% auto-cancel
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PMI required
No PMI

Understanding LTV and Mortgage Insurance

Loan-to-value ratio is a critical metric in mortgage lending that directly impacts your interest rate, loan approval, and whether you need to pay mortgage insurance. Understanding LTV is essential for both homebuyers and MLO exam candidates.

What Is LTV?

Loan-to-value ratio expresses the relationship between the loan amount and the appraised property value as a percentage. An LTV of 90% means you are borrowing 90% of the home's value and putting 10% down. Lenders use LTV to assess risk — higher LTV means less borrower equity and greater risk of loss if the borrower defaults. This is why loans with LTV above 80% typically require mortgage insurance, which protects the lender (not the borrower) in case of default. Combined LTV (CLTV) includes any second liens such as HELOCs or second mortgages.

PMI vs. MIP

Private mortgage insurance (PMI) applies to conventional loans with LTV above 80%. PMI rates vary by credit score and LTV, typically ranging from 0.3% to 1.5% annually. The key advantage of conventional PMI is that it can be removed once your LTV reaches 80% (by request) or 78% (automatic cancellation under the Homeowners Protection Act of 1998). FHA loans use Mortgage Insurance Premiums (MIP) instead, which include an upfront premium of 1.75% and annual premiums of 0.50-0.55%. For FHA loans with less than 10% down, MIP lasts the life of the loan.

LTV on the MLO Exam

The NMLS SAFE exam frequently tests LTV concepts including how to calculate LTV and CLTV, maximum LTV limits for each loan program (97% conventional, 96.5% FHA, 100% VA/USDA), when mortgage insurance is required and how it differs between conventional and government loans, and the rules for PMI cancellation under the Homeowners Protection Act. Understanding the relationship between LTV, risk, and mortgage insurance pricing is fundamental to loan origination and will appear in multiple exam questions across different content areas.

Frequently Asked Questions

What is a good loan-to-value ratio?
An LTV of 80% or less is considered ideal because it means you have at least 20% equity, eliminating the need for private mortgage insurance (PMI). However, many loan programs allow higher LTVs — FHA allows up to 96.5%, VA and USDA allow 100%, and conventional loans can go up to 97%.
When can I remove PMI from my mortgage?
For conventional loans, you can request PMI removal when your LTV reaches 80% based on the original property value. Under the Homeowners Protection Act, your servicer must automatically cancel PMI when your LTV reaches 78% based on the original amortization schedule. FHA MIP on loans originated after June 2013 with less than 10% down cannot be removed for the life of the loan.
How much does PMI cost per month?
PMI typically costs between 0.3% and 1.5% of the original loan amount annually, divided into monthly payments. For a $300,000 loan, that ranges from $75 to $375 per month. The exact rate depends on your credit score, LTV ratio, loan type, and loan amount.
What is the difference between PMI and MIP?
PMI (Private Mortgage Insurance) applies to conventional loans and can be removed once you reach 80% LTV. MIP (Mortgage Insurance Premium) applies to FHA loans and includes an upfront premium of 1.75% of the loan amount plus annual premiums of 0.55% (for most borrowers). FHA MIP is generally not removable on loans with less than 10% down.
Does a higher down payment always save money?
Generally yes — a larger down payment means a lower LTV, smaller loan amount, lower monthly payments, and potentially no PMI. However, the marginal benefit depends on your situation. Going from 3% to 10% down eliminates significant PMI costs, but the savings from 20% to 25% down are smaller since PMI is already eliminated at 20%.

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Master LTV & PMI for the MLO Exam

Practice LTV calculations and mortgage insurance questions with our AI-powered SAFE MLO exam prep platform.

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