LTV (Loan-to-Value Ratio)

The percentage of a property's value that a bank will lend you as a mortgage.

What is LTV (Loan-to-Value Ratio)?

Loan-to-Value (LTV) ratio is the proportion of a property's market value that a bank will finance through a mortgage. For example, if a property is valued at AED 2,000,000 and the bank offers 75% LTV, they will lend AED 1,500,000 and you must provide AED 500,000 as a down payment. LTV is one of the most important factors in mortgage approval because it determines your required down payment and influences the interest rate you receive.

LTV (Loan-to-Value Ratio) in the UAE

The UAE Central Bank strictly regulates maximum LTV ratios. For UAE nationals: up to 80% for first property under AED 5M, 70% above AED 5M. For expats: up to 75% for first property under AED 5M, 65% above AED 5M. Second and subsequent properties have lower LTV limits. These regulations were introduced in 2013 to stabilize the property market.

Worked Example

Property value: AED 2,000,000. You're a first-time expat buyer. Maximum LTV = 75%. Maximum mortgage = AED 1,500,000. Minimum down payment = AED 500,000 (25%). If the property was above AED 5M, your LTV drops to 65%, requiring a 35% down payment.