Loan to Value Calculator

How to Use the LTV Calculator – Step-by-Step

• Enter the Loan Amount you are borrowing or planning to borrow. This is the total principal amount before any disbursement.
• Enter the Property or Asset Value. Use the lender-assessed value, not the market asking price. If you do not have a valuation yet, use the expected purchase price as an estimate.
• Click Calculate LTV to see your loan-to-value percentage and the equity/down payment requirement.

Tip: Run this calculation at multiple price points. Even a 5% reduction in LTV can save 0.25% on interest rate, which compounds to lakhs over 15-20 year tenures.

LTV Ratio Formula

LTV = (Loan Amount / Property or Asset Value) x 100

Equity Required = Property Value – Loan Amount

Example:

• Property Value: Rs 50,00,000
• Loan Amount: Rs 40,00,000
• LTV = (40,00,000 / 50,00,000) x 100 = 80%
• Down Payment Required: Rs 10,00,000 (20%)

At 80% LTV, this loan falls within RBI limits for the Rs 30-75 lakh bracket and should qualify at standard rates.

RBI LTV Guidelines for Different Loan Types

Home Loans (RBI Master Direction):

• Up to Rs 30 Lakh: Maximum 90% LTV. Minimum 10% down payment. Risk weight: 35%.
• Rs 30-75 Lakh: Maximum 80% LTV. Minimum 20% down payment. Risk weight: 35%.
• Above Rs 75 Lakh: Maximum 75% LTV. Minimum 25% down payment. Risk weight: 50%.

Other Secured Loans:

• Loan Against Property (LAP): Typically 60-65% LTV. Some NBFCs stretch to 70%.
• Gold Loan: Maximum 75% LTV (RBI mandated). Was temporarily 90% during COVID relaxation.
• Vehicle Loan: Up to 100% on-road price for new vehicles. 70-80% of depreciated value for used.
• Loan Against Securities: 50-65% depending on security type (equity, MF, bonds).

Source: RBI Master Direction on Housing Finance, updated 2024.

LTV and Interest Rate Relationship

Most banks in India use LTV as a pricing variable. Here is the typical rate differential:

• LTV below 60%: Best available rate (repo rate + 0.25-0.35%)
• LTV 60-75%: Standard rate (repo rate + 0.35-0.50%)
• LTV 75-80%: Standard rate + 0.10-0.25% premium
• LTV 80-90%: Standard rate + 0.25-0.50% premium

Cost impact example: On a Rs 50L home loan for 20 years, a 0.25% rate reduction saves approximately Rs 3.2 lakh in total interest. A 0.50% reduction saves Rs 6.3 lakh. This makes the down payment decision one of the highest-ROI financial choices a borrower can make.

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