Loan-to-Value (LTV) Ratio - Check What It Is & How to Calculate

LTV Ratio (%) = Amount Borrowed/Property Value X 100 

In case the value of the house is Rs.1 crore, Rs.65 lakh will be provided as a loan if the LTV ratio is 65%. 

Higher Loan to Value Ratio 

Advantages 

The main advantages of having a high LTV are mentioned below: 

1. Additionally, you can allocate your financial resources to other important purposes.
2. Moreover, you can choose properties located in better localities. 

1. Higher funding is provided.

Disadvantages 

The main disadvantages of having a high LTV are mentioned below:

1. You cannot bargain for better terms. 

1. You may end up in borrowing more money. 

1. Interest rates may be higher. 

1. The tenure may be longer. 

1. Higher EMI every month. 

RBI Guidelines on LTV 

The guidelines that have been set by the RBI regarding LTV ratio are mentioned below: 

1. In case the loan amount is Rs.30 lakh and lesser, up to 90% of the value of the property may be provided as a loan. 

1. In case the loan amount is between Rs.30 lakh and Rs.75 lakh, up to 80% of the value of the property may be provided as a loan. 

1. In case the loan amount is above Rs.75 lakh, up to 70% of the value of the property may be provided as a loan. 

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2. Loan Against Agricultural Land
3. Guide to Buy Flats
4. Home Loan Procedure

1. Top Housing Finance Companies
2. Agricultural Loans in India
3. Home Loan Processing Fee
4. Home Loan Provisional Certificate

1. Documents Required For Home Loan
2. Documents for Buying Resale Flat
3. Secured Vs Unsecured Loan
4. Home Loan Approval Time

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