Down Payment and LTV: Work Out Your Loan From the Property Price

You found a home listed at $400,000 and you have savings for the down payment. The lender will not ask how much you want to borrow first — it will look at how much you borrow compared with what the property is worth. Put 20% down and you are asking for a $320,000 loan, an LTV of 80%. Put 30% down and the loan drops to $280,000, an LTV of 70%.

That single ratio, loan-to-value, shapes the conversation with a lender, and the down payment behind it shapes your monthly budget for decades. At 6.5% over 30 years, the extra $40,000 down in the example above lowers the payment by $252.83 a month and the total interest by $51,015.52.

Loan Calculator lets you start where you actually are: with a price and a down payment. It works out the loan, shows the LTV as you type, and flags it in red when it goes above 70%.

What should you compare?

Before you settle on a down payment, look at four numbers together rather than one at a time:

• Loan amount — the property price minus your down payment. This is what you pay interest on.
• LTV (loan-to-value) — the loan as a percentage of the price. Lenders often use it to decide how much they will lend and on what terms.
• Monthly payment — what the loan costs you every month at the rate and term you are quoted.
• Total interest — what the loan costs over its full life if you never pay it off early.

Down payment and LTV at a glance

All figures are for a $400,000 home at 6.5% a year over 30 years (360 monthly equal payments).

Every 5 points of down payment ($20,000 here) moves the payment by about $126 and the total interest by about $25,500. The relationship is almost perfectly straight: the loan shrinks, and everything calculated from the loan shrinks with it.

1. LTV: the ratio lenders look at first

Best for: understanding why a lender's answer changes when your down payment changes.

LTV compares the loan with the value of the property securing it:

Loan = Property price − Down payment
LTV  = Loan ÷ Property price × 100
     = 320,000 ÷ 400,000 × 100 = 80%

A lower LTV means the lender has more of a cushion if the property has to be sold, so many lenders reserve their better terms for lower LTVs. Some cap how high the LTV can go, and some add a higher rate or extra insurance above certain levels. Those limits differ by lender, property type and loan program, so treat any single number as a question to ask, not an answer.

Loan Calculator rounds LTV to one decimal and uses 70% as its warning line. At exactly 70.0% you get the green summary; one step above it, you get the red warning. In the $400,000 example, a 29.9% down payment gives a $280,400 loan and an LTV of 70.1% — red — while 30% gives 70.0% — green. The payment difference between the two is just $2.53 a month.

2. Down payment as a percent or as an amount

Best for: matching the way you actually think about your savings.

Real estate listings and lenders usually talk in percentages ("20% down"), but your bank balance is a dollar figure. The app accepts both. Next to the Down payment field there is a toggle with % and amount:

• With % selected (the default), the app multiplies the price by your percentage. Anything above 100% is treated as 100%.
• With amount selected, the down payment is taken as money. If you have $95,000 saved, the app shows a $305,000 loan and an LTV of 76.3%.

If the down payment is equal to or larger than the price, there is nothing left to borrow and the line under the fields reads "The property price must be larger than the down payment".

The price and the down payment use the same unit chips as the loan amount. If thousand is selected, type 400 for a $400,000 price and 95 for a $95,000 down payment.

3. What a bigger down payment actually saves

Best for: deciding whether to stretch your savings or keep a cushion.

Going from 20% down to 30% down on the $400,000 home costs $40,000 more cash up front. In return:

• the monthly payment falls from $2,022.62 to $1,769.79, a saving of $252.83 a month;
• the total interest over 30 years falls from $408,140.64 to $357,125.12, a saving of $51,015.52.

That works out to roughly $1.28 less interest for every extra dollar you put down — if you keep the loan for the full term. Pay it off early or sell and the real saving is smaller, because the interest you avoid is spread across all 360 months.

The trade-off is liquidity. Money in the down payment is money you cannot use for moving costs, repairs or an emergency. A middle path many borrowers consider is a smaller down payment now and extra payments later, when the cushion is rebuilt. You can model exactly that with extra monthly payments. And remember that closing costs, fees and insurance come on top of the down payment; the true APR guide shows how to include them.

4. How to work out the loan from a property price in Loan Calculator

Best for: testing several down payments in a minute, before you talk to any lender.

1. On the calculator form, open Advanced options and turn on Work out the loan from a property price.
2. Enter the Property price.
3. Enter your Down payment and choose % or amount.
4. Read the line under the fields. At 70% LTV or below it is green, for example "Loan $280,000.00 · LTV 70%". Above 70% it turns red, for example "LTV 80% — above 70%, many lenders want a bigger down payment or charge more".
5. Notice that the Loan amount field has filled itself in and is locked. While the switch is on, the loan always equals price minus down payment, so the two numbers can never disagree.
6. Enter the Annual interest rate (%/year) and the Term, then tap Calculate to see the payment, total interest and the full Amortization schedule.
7. Change the down payment and tap Calculate again to compare. Use Save loan to keep each version.

Turn the switch off when you want to type a loan amount directly again. Everything runs on your phone, so the price of the home you are considering never leaves it.

Which down payment should you choose?

There is no single right percentage. What you can do is see the full cost of each option before a lender sees your file.

FAQ

What is LTV?

LTV, or loan-to-value, is the loan amount divided by the property price, times 100. A $320,000 loan on a $400,000 home has an LTV of 80%. The larger your down payment, the lower the LTV.

Is 70% LTV a legal limit?

Not in the app's sense. Loan Calculator uses 70% as a fixed warning line to prompt you to check. Actual limits are set by each lender and can depend on the property, the borrower and the loan program, so ask the lenders you are considering.

Should I put down as much as I can?

A bigger down payment lowers the payment and the total interest, but it also locks up cash. Many people keep an emergency fund and money for closing costs first. The app shows the cost of each option; the right balance depends on your situation.

Can I type the down payment in dollars instead of a percentage?

Yes. Switch the toggle next to Down payment from % to amount. The loan and LTV update as you type.

Does the app work offline?

Yes. The property price, down payment, LTV and every result are calculated on your device and work with no internet connection. Nothing you type is uploaded.