# Loan-To-Value(LTV) Percentage Calculation

(A financial guide before going for a big purhase)

# Loan to Value Ratio Calculator

This Risk assessment measurement calculator is used to figure out the ratio of a loan to the value of an asset purchased.

## Loan-To-Value Percentage Calculation Definition, Formulae

Loan to Value ratio is the amount that you can borrow to finance your home.

The formula of calculating loan to ratio is as follow:

**LTV ratio = MA / APV**

Where

MA is Mortgage Amount Owed

APV is Appraised (or) Estimated Property Value

**Example:**

John borrows $130,000 to purchase a house worth $150,000

LTV ratio = $130,000 / $150,000

LTV ratio is **87%**

The remaining 13% represent the lender's haircut, adding up to 100% and being covered from the borrower's equity.