Loan-to-Value (LTV) ratio is the percentage of an asset’s value that a lender will finance. The RBI sets ceilings on LTV to manage systemic credit risk.
Indian LTV ceilings
| Loan type | Maximum LTV (RBI ceiling) |
|---|---|
| Home loan, principal ≤ ₹30 lakh | 90% |
| Home loan, ₹30 lakh – ₹75 lakh | 80% |
| Home loan, > ₹75 lakh | 75% |
| Gold loan (organised lenders, banks) | 75% |
| Gold loan (NBFCs) | 75% |
| Loan against property (LAP) | 50–70% (lender discretion) |
Worked example
Property value: ₹60 lakh. RBI ceiling for this band: 80%. Maximum loan: 80% × 60 lakh = ₹48 lakh. Borrower must arrange the remaining ₹12 lakh as own contribution (down-payment + registration + stamp duty).