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.
What is the maximum LTV for expats in the UAE?
75% for the first property valued under AED 5 million, and 65% for properties above AED 5 million. Second/subsequent properties have even lower limits.
Does LTV affect my interest rate?
Yes — lower LTV (larger down payment) typically qualifies you for better interest rates because the bank takes on less risk.
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See also: related UAE mortgage guide.
LTV (Loan-to-Value Ratio)
The percentage of a property's value that a bank will lend you as a mortgage.
What Does It Mean?
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.
UAE Context
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.
Common Questions
What is the maximum LTV for expats in the UAE?
75% for the first property valued under AED 5 million, and 65% for properties above AED 5 million. Second/subsequent properties have even lower limits.
Does LTV affect my interest rate?
Yes — lower LTV (larger down payment) typically qualifies you for better interest rates because the bank takes on less risk.
Related Terms
The maximum percentage of your monthly income that can go toward total debt repayments, capped at 50% by the UAE Central Bank.
The benchmark interest rate at which UAE banks lend to each other, used as the base for variable-rate mortgages.
The upfront cash payment you make when buying a property, determined by UAE Central Bank LTV regulations.
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