MORTGAGE CALCULATIONS & 

EQUATIONS 
 

Use these helpful equations to calculate important 

mortgage ratios and to solve the problems in this course: 
 
LOAN-TO-VALUE 
Loan-to-value (LTV) = Loan amount / the lower of the purchase price and the appraised value
Or
LTV = loan amount / value 

 
COMBINED LOAN-TO-VALUE 
Combined loan-to-value (CLTV) = The sum of all loan amounts / the lower of the purchase
price and the appraised value
Or
CLTV = Total loan amounts / Value

 
DEBT-TO-INCOME RATIO  
DTI = (Total current monthly debts + PITIA) / Gross monthly income
 
DOWN PAYMENT REQUIREMENTS  
Down payment = purchase price (or appraised value) / LTV
 
INTEREST-ONLY MORTGAGE PAYMENTS  
Interest-only payment = loan amount x interest rate / 12 (for the months of the year) 
 

 
PITIA LOAN  
PITIA = Principal payment + interest payment + taxes + insurance + HOA
 
LOAN DISCOUNT POINTS  
Loan amount x Discount points(%) = Cost to the borrower ($)

 
LOAN ORIGINATION POINTS 
Loan amount x loan origination points = cost of the origination points 

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