NiveshLedger
Loans

What is Loan-to-Value Ratio?

Updated 20 August 2026

The percentage of an asset's value that a bank is willing to lend, with the borrower funding the remaining portion as a down payment.

Explore all 140 terms in the app →

The Loan-to-Value Ratio, or LTV, is the percentage of an asset's value — most commonly a home or vehicle — that a bank is willing to lend you, with you funding the remaining percentage yourself as a down payment. For example, an LTV of 80% on a ₹50 lakh property means the bank will lend up to ₹40 lakh, and you'd need to arrange the remaining ₹10 lakh yourself.

Banks set LTV limits partly based on regulatory guidelines and partly based on their own risk assessment, and LTV can also vary depending on the loan amount — higher-value properties sometimes get a lower maximum LTV than lower-value ones. A lower LTV (meaning a larger down payment from you) often signals lower risk to the lender and can sometimes help you negotiate a marginally better interest rate on your loan.