LTV (loan-to-value)
The mortgage as a percentage of the property’s value — the number that sets your deposit and often your rate.
LTV (loan-to-value) is the mortgage as a percentage of the property’s value. Borrow €315,000 against a €350,000 home and the LTV is 90%: the loan covers 90% of the price, and your deposit covers the rest.
Why it matters
The Central Bank’s deposit rules are really LTV limits in disguise. A 10% minimum deposit is the same thing as a 90% maximum LTV. On a €350,000 home, that means a deposit of at least €35,000 and a maximum loan of €315,000. On a €500,000 home, the minimum deposit rises to €50,000, with a maximum loan of €450,000. Buy-to-let purchases sit under a stricter rule, requiring a 30% deposit — €90,000 on a €300,000 property.
Lenders also price their rates by LTV band: the lower your LTV, the better the rate you tend to qualify for, because a smaller loan against the same property value is less risk for the bank. This is why LTV falls as you repay your mortgage, and why the rate available to you can improve over time even if nothing else about your finances has changed.
Not to be confused with
LTV is often mentioned alongside the loan-to-income limit, but they measure different things. LTV compares the loan to the value of the home; LTI compares the loan to your income. A borrower can be well within the LTI limit and still be refused at a high LTV, or vice versa — both rules apply independently.
LTV is also the same fact as equity, just seen from the other side. If your LTV is 90%, your equity in the home is the remaining 10%. As LTV falls, equity rises by exactly the same amount.