LTV

Full form: Loan-to-Value Ratio

Loans & Credit

LTV is the percentage of property value a bank will lend. RBI mandates: up to 90% for loans below Rs 30L, 80% for Rs 30-75L, 75% above Rs 75L. Determines minimum down payment.

In detail

LTV calculated on lower of purchase price or market value. Down payment amount directly impacts EMI and total interest. Stamp duty and registration (5-8% of property value) are paid separately from own funds -- NOT covered by the home loan.

Formula

Minimum down payment = Property value x (1 - Max LTV%)nTotal funds needed = Down payment + Stamp duty + Registration

Real-life example

🇮🇳 India example

Ananya buys Rs 80L flat. LTV 80% = Rs 64L loan. Down payment = Rs 16L. Plus stamp duty + registration Rs 6L. Total own funds needed = Rs 22L minimum.

Frequently asked questions

Does bank loan cover stamp duty? ▼

No. Stamp duty (5-7%) and registration (1%) must be paid from own funds. Banks lend only against property value, not registration costs.