Credit
Loan-to-Value
pronounced: [L-o-a-n---t-o---V-a-l-u-e]
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Loan-to-Value (LTV) is the ratio of the loan amount sanctioned to the appraised value of the asset being financed, expressed as a percentage.
The RBI caps LTV for home loans at 90% for loans up to ₹30 lakhs, 80% for loans between ₹30 lakhs and ₹75 lakhs, and 75% for loans above ₹75 lakhs. A lower LTV means the borrower contributes a larger down payment, which reduces both the lender's risk and the borrower's interest outflow.
Key Facts
| Fact | Value |
|---|---|
| Interest Rate | 90% p.a. |
| Maximum Limit | ₹30 lakh |
Example
A ₹50 lakh home loan at 8.5% p.a. for 20 years has an EMI of ₹38,601/month. Total interest paid = ₹42,64,240 — almost equal to the principal. Making part-prepayments from year 6 can reduce tenure by 4+ years.
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Last updated: 2 June 2026