LTV Calculator
All Loan Against Property Calculators
What is LTV Calculator?
A Loan-to-Value (LTV) Calculator is an online tool that one can use to estimate the sanction amount they can avail of through a Loan Against Property. Enter a few basic details to know the loan amount you may be eligible for and the EMI payable towards repayment of the loan.
The LTV Calculator showcases eligibility on the basis of the approximate market value of the property to be mortgaged. At present, Bajaj Housing Finance extends funding worth up to 70–75% of the property value under a Loan Against Property.
How to Use the Loan-to-Value (LTV) Ratio Calculator?
The LTV ratio calculator comprises five fields. These are:
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Employment type
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Property value
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Property type
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Tenor (in years)
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Interest rate
Follow the steps below to use a LTV calculator online:
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Select whether you are a self-employed or a salaried individual.
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Enter property’s current market value.
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Choose between a residential or commercial property type.
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Enter the tenor and current rate of interest.
You can view the eligible loan amount instantly after inputting these variables. To view the EMI amount, interest payable, and total payable amount, you need to enter a suitable tenor in the mortgage LTV calculator. You can also tune the term as per your convenience to determine an EMI you are comfortable bearing every month.
However, the instalment amount can vary when you actually apply for a Loan Against Property based on your eligibility and applicable interest rate. The loan-to-value ratio calculation can also differ depending on specific factors.
What is Loan-to-Value Ratio?
The loan-to-value-ratio, or LTV, denotes the percentage of a property’s actual price that can be obtained as a loan. It denotes the maximum amount of financing you are entitled to receive against the pledged property. The LTV ratio typically ranges between 40% and 75% for a Loan Against Property. This ratio can vary depending on whether the pledged property is residential or commercial, and self-occupied, rented, or vacant.
The loan-to-value ratio calculation is based on the property’s recent valuation report. While one can obtain up to 75% of the property value as a loan, the exact amount varies as per your profile and the property in question.
Use a property loan EMI calculator to determine the amount and tenor you are comfortable with to make an informed decision.
How is the Loan-to-Value calculated?
The loan-to-value ratio is calculated by taking the maximum amount you are eligible to borrow and dividing it by the pledged property’s appraised value. The result can be multiplied by 100 to express this ratio in percentage.
Take the following table as an example to understand how LTV is calculated.
| Particulars | Amount |
|---|---|
| Property Value | Rs.80 Lakh |
| Amount Borrowed | Rs.48 Lakh |
| LTV = Amount Borrowed / Property Value | 60% |
The loan amount you can borrow against a pledged property is determined based on this calculation. It is possible to get a lower loan amount as per your requirements. You should note that a lower LTV implies mitigated risk and better loan terms.
Formula to Calculate LTV Ratio
The LTV ratio formula uses two variables, namely the pledged property’s current market value and the loan amount you are eligible for. It can be expressed as:
LTV Ratio Formula = (Loan amount/Property’s market value) * 100
For example, suppose a property is valued at Rs.2.5 Crore, and you are eligible for a loan amount of Rs.1.75 Crore. As per the loan-to-value ratio formula, LTV ratio will be [(17500000/25000000) * 100] or 58.33%.
Usually, the maximum loan amount for which you are eligible can differ for residential and commercial properties. In most cases, a residential property fetches a higher LTV ratio than a commercial property.
You can use the Loan Against Property Calculator to get an estimate of the maximum obtainable loan amount. However, note that several factors are considered for computing the total loan amount you can avail of. For instance, the pledged property’s occupancy status is an essential loan-to-value ratio determinant.
Factors That Affect LTV Calculation
LTV ratio calculation is subject to various factors concerning the property itself and the applicant. These three aspects of the pledged property are vital in this respect:
| Property Type | Residential properties attract higher LTVs than their commercial counterparts. It can be higher by 10% in some cases. Nonetheless, LTVs for specific commercial properties are also high. |
| Location | The property’s location is significant to its saleability and the LTV ratio it fetches. Residential properties in high-end localities will attract a Higher loan-to-value ratio than those in localities with fewer amenities. It’s the same for commercial properties. |
| Property Age | An old property will have a lower sale value and, thus, invite a lower LTV ratio than a newer property. |
To calculate a loan-to-value ratio, lending institutions check various factors, including:
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Credit score: A good credit score, preferably above 750, invites a high loan-to-value ratio and vice versa
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Work experience: A prolonged work experience will attract a more significant loan-to-value ratio; you can be either salaried or self-employed
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Your age is also crucial in LTV calculation for Home Loan and Loan Against Property
*Terms and conditions apply.
Disclaimer
This calculator is provided for general information purposes only and should not be considered as financial advice. The results obtained from the calculator are estimates based on your inputs and may not reflect the actual terms or conditions of any loan. Users are responsible for verifying the accuracy of the calculator. Actual loan figures may vary based on specific loan products, interest rates, individual financial circumstances, and parameters laid down by Bajaj Housing Finance Limited (‘BHFL’).
Users are advised to consult with a qualified financial advisor to obtain accurate and personalized advice regarding their specific loan needs. The use of and the results of this calculator do not guarantee approval for a loan. Sanction and disbursal loans are at the sole discretion of BHFL. The calculator does not take into account the potential fees or charges levied while availing the loan. Users should carefully review the terms and conditions of any loan agreement before making financial decisions.
By using this calculator, the Users agree that placing reliance on the aforementioned information shall always be the sole responsibility and decision of the User and the User shall assume the entire risk of any use made of this information. In no event shall BHFL or the Bajaj Group, its employees, directors or any of its agents or any other party involved in creating, producing, or delivering this Website shall be liable for any direct, indirect, punitive, incidental, special, consequential damages (including lost revenues or profits, loss of business or loss of data) or any damages whatsoever connected to the User’s reliance on the aforementioned information.
Loan-to-Value Calculator FAQs
LTV represents the relationship between the eligible loan amount and the property’s current market value. The loan-to-value ratio is the highest percentage of your property’s value that a lender will finance. Lending institutions use this ratio for all types of secured financing options, including but not limited to a Loan Against Property and Home Loan. A borrower can obtain any loan amount up to the maximum LTV but not exceeding that.
Lenders check several factors to determine the LTV ratio, including property type, age and location, the applicant’s credit score, income profile, debt-to-income ratio, and work experience. Loan-to-value is higher for residential properties in most cases. New properties and/or ones located in areas with improved amenities attract more significant loan-to-value ratios.
The LTV ratio for a mortgage loan is calculated by dividing the available loan quantum by the pledged property’s current value and then multiplying it by 100. It is expressed in percentages mostly. If the eligible loan amount is Rs.1 Crore and the mortgaged property’s value is Rs.2 Crore, the loan-to-value ratio is 50%. One may use a Loan-to-Value Ratio Calculator to compute the same.
This online calculator requires five inputs primarily to that end, namely, employment type, property type and its current market value, tenor, and interest rate. Select whether you are salaried or self-employed, if the property is commercial or residential, the repayment tenor, the rate of interest, and then enter its latest value to check the loan amount for which you are eligible. Divide that sum by your property’s value and multiply it by 100 to calculate the loan-to-value ratio for a mortgage loan.
The sum differs based on whether the mortgaged property is a house or a commercial property. Depending on whether it’s self-occupied, rented, or vacant, a house fetches a high loan-to-value ratio compared to a commercial asset. The LTV ratio for a mortgage loan on a self-occupied property is significantly higher than one that is vacant or rented.
The mortgage loan-to-value ratio measures the correlation between an immovable property’s current price in the market and the loan quantum you can take out against it. This ratio is expressed in percentage. A property value calculator can be used to find out the LTV you are eligible for. The primary factor in this calculation is the property type. Occupancy status is also a vital aspect that influences this ratio. These are directly associated with how sellable an immovable asset is.
A second mortgage on the same property adds to the previous loan-to-value ratio. Suppose you have an existing mortgage loan of Rs.35 Lakh on an Rs.80 Lakh property. You decide to mortgage the property a second time to borrow a loan of Rs.20 Lakh. The LTV ratio was 43.75% in the first case. An additional loan of Rs.20 Lakh increases the loan-to-value ratio to 62.5%. You can use a mortgage loan-to-value calculator to determine the cumulative LTV you are eligible for.
Taking out a second mortgage on a property is more cumbersome than the first. You can consider a Top-up Loan from your current lender if you did not obtain the entire amount for which you were eligible in the first case. You can also obtain a new loan on your immovable property. However, the eligibility criteria for a fresh, second mortgage loan are more rigid.
Generally, these criteria include an applicant’s age, credit score, occupation type and status, and the mortgaged property’s current value and age. The current debt-to-income ratio is a significant criterion in this regard. Ideally, existing obligations should not account for more than 60–80% of an applicant’s income to be deemed eligible for a second mortgage loan. Nonetheless, it’s wise to use a mortgage LTV calculator to make an informed choice before taking out a second mortgage.
*Terms and conditions apply.
You can use the formula given below to compute the loan-to-value (LTV) ratio:
LTV= principal amount/ market value of your property.
When the LTV ratio is 75%, it means that the borrowed loan amount is 75% of the asset's total value.
Ideally, a good LTV ratio should not exceed 80%. LTV higher than 80% means that borrowers may have to pay higher borrowing cost.
50% LTV means that you may get approved for a given loan amount at low interest rates.
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