Last updated: February 2026
LTV (Loan-to-Value) is the percentage of a property value the bank will finance; the remainder is your down payment. In practice, effective LTV often depends on the lower of purchase price and valuation.
LTV (Loan-to-Value) is the percentage of a property value the bank will finance; the remainder is your down payment. In practice, effective LTV often depends on the lower of purchase price and valuation, which is why valuation can change cash requirements quickly. This guide explains LTV mechanics, scenario drivers, and a planning approach using down payment and valuation-gap tools.
LTV is loan amount divided by the property value used by the bank. If valuation is lower than price, the bank may size the loan using the valuation figure, increasing required down payment.
Interactive Tool
LTV Visualizer
Inputs: purchase price, valuation (optional), desired loan amount. Outputs: effective LTV %, down payment required, and buffer suggestions.
Try the Down Payment Calculator| Driver | Typical effect | Why it matters |
|---|---|---|
| Borrower segment | Can change caps | Different risk and policy approaches |
| Owner vs investment | Investment often stricter | Risk and marketability |
| Off-plan/under construction | Often stricter baseline | Higher completion risk |
| Valuation below price | Effective LTV worsens | Loan base reduces |
You can have enough down payment (LTV ok) but still fail affordability (DBR). Or you can pass DBR but have insufficient down payment for your scenario. Plan both constraints together.
Valuation Gap Simulator
Inputs: price, valuation, target LTV, fees estimate. Outputs: additional cash required and options (renegotiate, increase DP, change property).
Explore our calculatorsBlog content is general information. It does not constitute financial advice. Consult a qualified professional before making financial decisions.