Understand About Types of Mortgage Loans
Jun 12, 2025 | 4 mins read
The Loan-to-Value (LTV) Calculator for a Loan Against Property (LAP) is a convenient and essential tool for determining the amount you can borrow against your property. Using an LTV Calculator allows borrowers to plan better, understand their LTV ratio clearly and assess their loan eligibility. This tool ensures transparency and simplifies the entire process of securing a Loan Against Property.
Calculate your property’s LTV quickly
Preferred loan amount
Interest rate (per annum)
Loan tenure (months)
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₹52,41, 690A Loan-to-Value Calculator is an online tool designed to help borrowers calculate the LTV ratio quickly and accurately. It provides an instant estimate of the loan amount you may be eligible for based on the market value of your property.
Purpose of an LTV Calculator
- Determines maximum loan eligibility based on the property value and the LTV ratio offered by the lender.
- Helps borrowers plan their finances better by revealing how much equity they may need to retain in the property.
- Reduces the time spent in manually calculating the loan-to-value ratio and ensures accuracy.
- Lenders in India use the LTV ratio to evaluate loan eligibility and risk, making it crucial for borrowers to understand their loan potential using the LTV calculator.
Using an LTV Calculator is simple and user-friendly. Follow the steps below to calculate your loan-to-value ratio:
Enter the Property Value: Provide the market value of your residential, commercial, or industrial property.
Select the Desired Loan Amount: Input the loan amount you wish to apply for.
Review the LTV Ratio: The calculator will instantly display the LTV percentage (loan amount ÷ property value × 100).
Common Features of an LTV Calculator
1. Real-Time Results: Get instant LTV percentage calculations.
2. Customised Input: Adjust input values like loan amount and property type for accurate calculations.
3. Flexible for All Properties: Supports entry for both residential and commercial properties.
Pro Tip: Use an LTV calculator to estimate eligibility before applying for a Loan Against Property. Different lenders may offer LTVs ranging from 50% to 80% of the property value.
The Loan-to-Value ratio can be calculated either manually or using an online tool. The formula is simple and straightforward:
Formula
LTV = (Loan Amount ÷ Property Value) × 100.
Example Scenarios
Residential Properties:
If the property value is ₹ 80 Lakh and the loan offered is ₹ 55 Lakh:
LTV = (₹ 55,00,000 ÷ ₹ 80,00,000) × 100 = 68.75%
The LTV ratio is 68.75%, meaning the lender is willing to loan 68.75% of the property’s value.
Commercial Properties:
If the property value is ₹ 1.2 Crore and the loan is ₹ 90 Lakh:
LTV = (₹ 90,00,000 ÷ ₹ 1,20,00,000) × 100 = 75%
Differences Between Manual and Calculator Results
Manual calculations may leave room for error, particularly with complex values or multiple terms involved. Using an online LTV calculator is faster, error-free, and more reliable.
The formula to calculate the loan-to-value ratio is:
LTV Ratio = (Loan Amount ÷ Property Value) × 100
Real-World Example Using Indian Market Values:
Case 1: Borrower A
Market Value of the Property: ₹ 50 Lakh
Loan Amount Applied For: ₹ 35 Lakh
LTV = (₹ 35,00,000 ÷ ₹ 50,00,000) × 100 = 70%
Borrower A's LTV ratio is 70%, meaning the lender is funding 70% of the total property value.
Case 2: Borrower B (High-Value Property)
Market Value of the Property: ₹ 2 Crores
Loan Amount Applied For: ₹ 1.4 Crores
LTV = (₹ 1,40,00,000 ÷ ₹ 2,00,00,000) × 100 = 70%
Time-Saving: Get instant results instead of spending time on manual calculations.
1. Accuracy:
Minimises errors and helps in precise financial planning.
2. User-Friendly Interface:
Easy to use, making it accessible to all types of borrowers.
3. Customisable Inputs:
Calculate LTV for different scenarios by adjusting the loan amount and property value.
4. Decision-Making Tool:
This tool helps you decide whether to proceed with your desired loan amount or modify it based on your eligibility.
5. Compare Loan Offers:
This tool enables you to analyse and compare LTV ratios offered by different lenders to secure the best deal.
1. Type of Property:
Residential properties typically have a higher LTV ratio compared to commercial or industrial properties.
2. Property Market Value:
The current market value of the property influences the maximum loan amount.
3. Loan Utilisation Purpose:
If the loan is used for purposes like business or education, the LTV ratios may differ.
4. Lender’s Policy
Different lenders have their own internal guidelines for deciding the maximum LTV they offer.
5. Borrower’s Creditworthiness:
Higher LTV ratios may require a good credit score for approval.
6. Location of Property: Due to their market demand, properties in prime locations may be eligible for a higher LTV.
1. Risk Assessment:
Lenders use the LTV ratio to assess risk. A higher LTV indicates more risk for the lender, potentially resulting in higher interest rates.
2. Loan Sanction Limits:
The LTV ratio determines the maximum amount a borrower can apply for against their property value.
3. Impact on Interest Rates:
Borrowers opting for a lower LTV often get better interest rates.
4. Equity Release:
Helps determine how much equity remains in the property after borrowing.
5. Down Payment Calculation:
For homebuyers applying for an LAP, LTV guides them on how much down payment they need to make.
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