Loan-to-Value (LTV) Ratio Calculator
The Loan-to-Value (LTV) ratio is a crucial metric used by lenders when underwriting a mortgage. It represents the ratio of the loan amount to the appraised value of the property, expressed as a percentage. A lower LTV ratio generally indicates a lower risk for the lender, which can translate into better loan terms and interest rates for the borrower. Conversely, a higher LTV ratio may suggest a greater risk and could lead to higher interest rates or the requirement for private mortgage insurance (PMI).
Formula: LTV Ratio = (Loan Amount / Appraised Property Value) * 100
Loan Amount:
Appraised Property Value:
Calculate LTV
function calculateLTV() {
var loanAmount = document.getElementById("loanAmount").value;
var propertyValue = document.getElementById("propertyValue").value;
var resultDiv = document.getElementById("ltvResult");
resultDiv.innerHTML = "; // Clear previous results
if (isNaN(loanAmount) || loanAmount <= 0) {
resultDiv.innerHTML = 'Please enter a valid loan amount.';
return;
}
if (isNaN(propertyValue) || propertyValue <= 0) {
resultDiv.innerHTML = 'Please enter a valid appraised property value.';
return;
}
var ltvRatio = (parseFloat(loanAmount) / parseFloat(propertyValue)) * 100;
var interpretation = "";
if (ltvRatio 80 && ltvRatio 90 && ltvRatio 95 && ltvRatio <= 100) {
interpretation = "This LTV ratio is above 95%. PMI will be required, and qualifying for the loan may be more challenging. It's advisable to explore options to reduce your LTV if possible.";
} else {
interpretation = "This LTV ratio is over 100%, which is uncommon for purchase mortgages and usually indicates a situation like refinancing where the loan exceeds the property value. This poses a very high risk for the lender.";
}
resultDiv.innerHTML =
'Your calculated Loan-to-Value (LTV) ratio is:
' + ltvRatio.toFixed(2) + '% ' +
'
Interpretation: ' + interpretation + ";
}
#loan-to-value-calculator {
font-family: sans-serif;
max-width: 600px;
margin: 20px auto;
padding: 20px;
border: 1px solid #ddd;
border-radius: 8px;
box-shadow: 0 2px 4px rgba(0,0,0,0.1);
}
#loan-to-value-calculator h2 {
text-align: center;
color: #333;
margin-bottom: 20px;
}
.calculator-inputs label {
display: inline-block;
margin-bottom: 8px;
font-weight: bold;
width: 180px; /* Fixed width for labels */
}
.calculator-inputs input[type="number"] {
padding: 8px;
margin-bottom: 15px;
border: 1px solid #ccc;
border-radius: 4px;
width: calc(100% – 190px); /* Adjust width relative to label */
box-sizing: border-box;
}
.calculator-inputs button {
background-color: #4CAF50;
color: white;
padding: 10px 15px;
border: none;
border-radius: 4px;
cursor: pointer;
font-size: 16px;
display: block;
width: 100%;
margin-top: 10px;
}
.calculator-inputs button:hover {
background-color: #45a049;
}
.calculator-result {
margin-top: 25px;
padding: 15px;
border-top: 1px solid #eee;
background-color: #f9f9f9;
border-radius: 4px;
}
.calculator-result p {
margin-bottom: 10px;
line-height: 1.6;
}
.calculator-result strong {
color: #0056b3;
}