Home Equity LTV Calculator

Purpose and model boundary

Use this calculator to see how much of your home you actually own, to read the two loan-to-value ratios a lender looks at, and to find how much more you could borrow before the combined balance reaches the limit a lender applies. It answers four separate questions from the same small set of figures: what your equity is worth in dollars, what share of the value the liens take, how much room is left under a stated combined limit, and how far today's value sits from each of the two mortgage-insurance thresholds.

Two ratios matter and they are not interchangeable. The first-mortgage loan-to-value divides only the main mortgage by the value; that is the ratio quoted on a refinance. The combined loan-to-value divides every lien by the value; that is the ratio a home equity lender underwrites to, and the one that decides whether a draw is possible. Adding a second lien moves the combined ratio and leaves the first-mortgage ratio untouched, which is why the calculator reports both rather than a single number.

The model is arithmetic on figures you supply. It is not an appraisal, a credit decision, an offer, or a prediction. Several things it deliberately does not model: whether a lender will actually lend to the limit it advertises, which turns on credit, income and the purpose of the draw; a second lien whose holder will not agree to subordinate to a new one; the appraisal you have not paid for, because the value entered here is your estimate and the lender will use its own; government-backed loans, whose mortgage insurance follows different rules and in some cases does not end at all; and the closing costs and interest rate on any new lien. There is no amortization here, so nothing projects a balance forward in time. Every figure describes the position as of the balances you enter today.

Inputs and units

Two inputs ship blank on purpose and are not an oversight. A blank second lien is read as zero, and a blank original price leaves the ratio against the original price blank. Requested Draw is required: entering zero is the explicit no-additional-draw case and produces an after-draw ratio equal to the current combined ratio, while an original price of zero is rejected as an invalid entry.

The calculator also carries two fixed mortgage-insurance ratios that are not entered by the reader. The request threshold is 80% and the automatic termination threshold is 78%. Both are stated in the delivered workbook as editable ratios on its data sheet, marked there as illustrative, and both are the conventional conforming-loan levels. They are held constant on this page. Government-backed loans follow different rules, so the two threshold outputs do not apply to them.

Value Uncertainty and Limit Step are required controls for the sensitivity table. They do not change the headline calculation at the values entered above it. They define an 11 × 11 comparison surface: plausible appraisals down the rows and lender limits across the columns.

Governing relationships

Write V for Home Value, M for First Mortgage Balance, S for Second Lien Balance, c for the Lender CLTV Limit expressed as a share of value, D for Requested Draw, P for Original Purchase Price, and r_request and r_auto for the two mortgage-insurance ratios, 80% and 78%.

A blank second lien is coalesced to zero before anything else happens, so S* equals S when a second lien is entered and zero when the field is blank. Everything owed against the home is then

• total liens L = M + S*
• home equity E = V − L
• equity share = E ÷ V
• first-mortgage loan-to-value = M ÷ V
• combined loan-to-value = L ÷ V

Equity and the equity share are the same quantity in dollars and as a share, so the equity share and the combined ratio always add to one hundred percent. Equity is reported signed: when the liens exceed the value it is negative, because an underwater home is a real position rather than an input error.

Borrowing room is the limit expressed in dollars, less what is already owed, floored at zero:

• borrowable at limit B = max(0, V × c − L)

The floor is load-bearing. Past the lender's limit the answer is zero, never a negative number that would read as money available. Two ratios follow from B and D:

• combined ratio if fully drawn = (L + B) ÷ V
• combined ratio after the draw you asked for = (L + D) ÷ V

The fully-drawn ratio lands exactly on the lender's limit whenever B is positive, which is what the limit means. It lands below the limit only when B has been floored at zero, in which case it equals the present combined ratio.

The two mortgage-insurance outputs invert the ratio rather than applying it. Each answers the question "what would the home have to be worth for the first mortgage to sit at this threshold":

• value needed to request cancellation = M ÷ r_request
• value at the automatic termination ratio = M ÷ r_auto

Because the automatic ratio is the lower of the two, the value it implies is the larger of the two. The last relationship is the one the whole calculator exists for:

• loan-to-value against what you originally paid = M ÷ P

That ratio is the one the automatic termination rule actually uses, and it can sit well above the ratio against today's value when the home has appreciated.

Every ratio whose denominator is the home value returns zero rather than an error when the value is zero or less, and both threshold inversions return zero if their threshold is zero or less. The ratio against the original price returns blank when no price is entered and zero when the price entered is zero or less. These guards keep the outputs readable while the status line carries the finding.

The sensitivity table reruns the same headroom calculation 121 times. Its rows move the appraisal from 2.5 standard deviations below the entered home value to 2.5 above it, using Value Uncertainty. Its columns move the lender's combined-loan-to-value limit five Limit Step intervals below and above the entered limit. Every cell is Headroom After Draw for that exact pair, not an interpolation in the page.

Only the appraisal axis is probability-weighted. Probability Draw Supported is the weighted share of plausible appraisals at the lender limit you entered where headroom is at least $0. Headroom P10, Headroom P50, and Headroom P90 describe the unlucky tenth, midpoint, and favorable tenth of that appraisal spread. The lender-limit columns are shopping scenarios and carry no probability.

Calculation sequence

1. Read the entered figures and coalesce a blank second lien to zero.
2. Add the first mortgage and the coalesced second lien to give total liens.
3. Subtract total liens from the home value to give equity, and divide equity by the value to give the equity share.
4. Divide the first mortgage by the value to give the first-mortgage ratio, and divide total liens by the value to give the combined ratio.
5. Multiply the value by the lender's limit, subtract total liens, and floor the result at zero to give the borrowable amount.
6. Add the borrowable amount to total liens and divide by the value to give the fully-drawn ratio. Add the required Requested Draw to total liens and divide by the value to give the after-draw ratio. A draw of zero makes the after-draw ratio equal the current combined ratio.
7. Divide the first mortgage by each of the two mortgage-insurance ratios to give the two values the home would need to reach each threshold.
8. When an original price is entered, divide the first mortgage by it to give the ratio against the original price; otherwise leave that output blank.
9. Sweep the lender limit from 60% to 95% in steps of one percentage point, recomputing the borrowable amount at each point, to drive the second chart. The sweep uses the same expression as step 5, so the curve reproduces the headline figure at the limit you entered.
10. Build the 11 × 11 sensitivity table by rerunning Headroom After Draw for every appraisal and lender-limit pair.
11. Weight the appraisal rows to return Probability Draw Supported and the 10th, 50th, and 90th percentile headroom figures at the entered lender limit. Do not probability-weight the lender-limit scenarios.
12. Evaluate the status conditions below in order and return the first one that is true.

Outputs and interpretation

Three results carry the answer. Borrowable At Limit is the headline: how much more you could borrow before the combined ratio reaches the lender's limit, in dollars, and zero when you are already at or above it. Home Equity is the value less everything owed, and it can be negative. Combined LTV is every lien against the current value, which is the ratio a home equity lender underwrites to. Read the three together: equity says what the position is worth, the combined ratio says where it sits against the rule, and the borrowable amount converts the gap between them into dollars.

Four charts carry the same figures visually. The first splits the current value into three claims: the first mortgage, any second lien, and your equity. Its equity bar is floored at zero, so an underwater position shows as no equity bar rather than a bar below the axis; read the signed equity output for that case. The second plots the borrowable amount against the lender's combined limit across the 60% to 95% sweep, with a flat line at the amount your own lender's limit allows. The third shows the probability that the requested draw clears as the allowed combined loan-to-value changes. The fourth holds your lender's limit fixed and shows how the remaining room changes across the appraisal values used by the conditional table.

The conditional table appears after all four charts. Read down to see how appraisal uncertainty moves the answer and across to compare lender limits. The table body and its four supporting figures come from the calculation service. The page displays them and verifies the table's centre against the scalar result; it does not recompute probability or percentiles in the browser.

Validation and status logic

The calculator evaluates these conditions in the order shown and returns the first one that is true. Later conditions are never reached once an earlier one matches, so the order is the precedence. Lender CLTV Limit, PMI Auto LTV and the other names below are the figures defined above; PMI Auto LTV is the fixed automatic termination ratio of 78%. The final row is the fallthrough.

The last CHECK row is the finding this calculator exists to surface. It fires only when all three of its parts hold: an original price has been entered, the ratio against that original price is still above the automatic termination ratio, and the ratio against today's value has already fallen to or below it. Someone reading only the current-value ratio would conclude their mortgage insurance had ended. It has not.

Assumptions and limitations

• The home value is your estimate until a lender appraises it, and every ratio here moves with it. A value ten percent optimistic moves the combined ratio and the borrowable amount by more than ten percent.
• Balances are point-in-time figures you enter. Nothing amortizes, accrues interest, or projects forward, so a result describes today and not any future month.
• The lender limit is a scenario input, not an eligibility rule. Whether a lender will lend to its stated limit depends on credit, income, occupancy and the purpose of the draw, none of which is modelled.
• A second lien is treated as a balance that simply adds to the total. A holder who will not subordinate to a new lien can stop a draw the arithmetic here says is available.
• The two mortgage-insurance thresholds are the conventional conforming-loan levels. Government-backed loans follow different rules, and in some cases their insurance does not end at all.
• Nothing about the cost of a new lien is modelled: no closing costs, no appraisal fee, no interest rate, no draw period, and no payment.
• Mortgage insurance itself is not priced. The calculator reports where the thresholds sit, not what the premium is or what removing it would save.
• The first chart floors its equity bar at zero for readability. The signed equity output is the authority for an underwater position.
• The sweep chart covers combined limits from 60% to 95%. A limit outside that band is still valid input and still produces a correct headline figure; it just sits off the plotted range.
• The appraisal spread is a normal weighting around the value entered. It describes uncertainty in that estimate, not a lender's appraisal process or a guarantee that an appraisal falls inside the displayed rows.
• Lender-limit columns are unweighted scenarios. Probability Draw Supported varies the appraisal at the lender limit entered; it does not estimate which lender limit you will receive.

Restrictions and non-computing states

The home value must be above zero. A value of zero or less is rejected by the model, because every ratio here divides by it. The first mortgage balance, any second lien balance and any requested draw must each be zero or more; a negative entry in any of them is refused before anything is calculated. The lender's combined limit must be above zero and no more than one hundred percent. An original purchase price, if entered at all, must be above zero; leaving it blank is always allowed and is the shipped state.

Blank is a meaningful state for the two optional inputs and is not the same as zero. A blank second lien is read as no second lien. A blank original price leaves the ratio against the original price blank, which also means the mortgage-insurance disagreement finding cannot fire. Requested Draw is required; enter zero to evaluate the current balances with no additional draw.

Two conditions return CHECK rather than refusing: negative equity, and a combined ratio already above the lender's limit. Both are real positions, the arithmetic stays visible, and the borrowable amount reads zero rather than going negative.

Errors and warnings

Three different things can go wrong and they mean different things.

A rejected entry happens before any calculation. The published input rules refuse a figure outside its stated bounds, such as a negative balance or a combined limit above one hundred percent, and the page asks you to correct the field. No result is produced because none was requested.

A NOT VALID result is the model's own finding about a combination it accepted but cannot answer. It is returned with the exact text shown in the table above. The figures on the page are no longer a reliable reading of your position when this appears; treat the status line as the answer and fix the input it names.

A CHECK result is also the model's own finding. The arithmetic computed and stays on the page, but something about it needs your attention: no equity, no room under the limit, a draw larger than the room, or the two mortgage-insurance rules disagreeing. A CHECK is not an error, and the reason text says which case applies.

A connection or calculation-service failure is none of the above. If the calculation service cannot be reached or does not answer, the page reports that it could not calculate. That is an availability problem, never a finding about your inputs, and it is never reported as a zero. A blank output where an optional input was left empty is expected behaviour, not a failure.

The loan-to-value ratio used throughout this calculator is the standard consumer definition. The Consumer Financial Protection Bureau describes it in What is a loan-to-value ratio and how does it relate to my costs? as a measure comparing the amount financed with the appraised value of the property.

Home equity, and the idea that what you can borrow against it depends on the value less what is already owed, is set out by the Consumer Financial Protection Bureau in What is a home equity loan? and What is a home equity line of credit (HELOC)?. Both pages also set out the risk this calculator does not quantify: the home secures the debt, and a lender can foreclose if the debt is not repaid. Neither page states a percentage of value that lenders allow, which is why the combined limit is an input here rather than a built-in constant.

The two mortgage-insurance ratios, 80 percent for a borrower-requested cancellation and 78 percent for automatic termination, are the conventional conforming-loan levels described by the Consumer Financial Protection Bureau in When can I remove private mortgage insurance (PMI) from my loan?. That page is also the source for the point the calculator's last CHECK exists to make: under those rules both thresholds are measured against the original value of the home, meaning the purchase price or appraised value at the time of purchase, and not against a higher value reached later through appreciation. The statutory basis is the Homeowners Protection Act of 1998, codified at 12 U.S.C. 4902, Termination of private mortgage insurance.

Cancellation measured against a current value is a separate route with a different decision-maker, which is why the status text says it has to be requested and the lender decides. Fannie Mae's servicing rules for conventional loans, B-8.1-04, Termination of Conventional Mortgage Insurance, state that a servicer must not solicit a borrower for termination based on current value and may terminate on that basis only in response to a borrower-initiated request, and that the borrower supplies a property valuation based on an interior and exterior inspection. The calculator reports the value the home would need to reach each threshold; it does not assert that reaching it ends the insurance.

The arithmetic itself, equity as value less liens, each ratio as a balance over a value, the borrowable amount as the limit in dollars less what is owed, and each threshold value as a balance divided by its ratio, is standard financial mathematics rather than a method attributable to a published source. It is documented and independently checked in the delivered audit that accompanies the downloadable workbook. The two mortgage-insurance ratios are carried in that workbook as editable figures marked illustrative; no lender schedule, statutory table, or commercial publication is reproduced. Agency and standards-body names mentioned here are trademarks of their owners, and none of them endorses this calculator or has reviewed it.

These sources provide consumer and servicing context; they do not supply this calculator's inputs or certify its result. This calculator is informational and is not lending, appraisal, legal, tax, investment, or financial advice. A lender will use its own appraised value, its own combined limit, and eligibility rules that are not modelled here.