Property and loan
The currency is whatever you enter. Your lender’s actual limit depends on country, product and borrower.
Loan ÷ value × 100
A 350,000 loan against a 500,000 property is an LTV of 70%; the 30% the bank does not finance is your equity. Almost everything the lender decides — the rate, the conditions, whether the loan happens at all — starts from this one ratio.
Why 80% keeps coming up
Below roughly 80%, the property could lose a fifth of its value and a forced sale would still repay the debt, so lending stays cheap. Above it the lender starts charging for real risk: a higher rate, mortgage insurance, or a flat no. The exact threshold varies by country and product, but the logic is the same everywhere.
LTV falls two ways
Every principal payment shrinks the loan side, and any rise in the property’s value grows the other. That is how an LTV that starts at 90% can sit below 80% a few years later without any special effort — and why refinancing after prices rise often unlocks better terms.
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Frequently asked questions
Q. Purchase price or appraised value?
Lenders usually take the lower of the two. If you paid 500,000 but the appraisal says 470,000, the ratio is worked out on 470,000 — one reason a loan offer can come in smaller than expected.
Q. What counts as a good LTV?
Lower is always cheaper and safer. In many markets the conventional line is 80%: below it you tend to reach the best rates and skip mortgage insurance; above it, each unit borrowed costs more. A 20% down payment is simply a way of starting below that line.
Q. How do I lower my LTV?
Three levers: a larger down payment before signing, principal payments while the loan runs, and a fresh appraisal after prices have risen. The last one changes the ratio at no cost beyond the appraisal fee.