Loan-to-Value ratio

Loan-to-value (LTV) expresses the relationship between the mortgage debt and the market value of the real estate, stated as a percentage. A lender determines for each financing proposal what proportion of the property value it will advance. This threshold varies depending on location, asset class, and tenant quality.

An LTV of 70% means that for a property valued at €1 million, you can secure a maximum mortgage of €700,000. The bank retains the remaining 30% as a loss buffer. For acquisition financing, LTV typically ranges from 60–80%; for operational assets with long-term lease agreements, it may be higher. The ratio reflects lending risk, market conditions, and the property's income stability.