The short answer
LTV is loan to value — the share of a property's assessed value a lender will advance. In India it runs from about 70% for self-occupied residential down to 40% for a plot. Crucially, it is applied to the lender's valuation, not to what you think the property is worth.
Typical LTV by property type
| Property | Typical LTV | Why |
|---|---|---|
| Residential, self-occupied | 60 – 70% | Easiest to value and to sell |
| Residential, rented or vacant | 55 – 65% | Slightly harder to enforce against |
| Commercial, self-occupied | 55 – 65% | Thinner resale market |
| Commercial, let out | 50 – 60% | A tenant complicates enforcement |
| Industrial | 40 – 55% | Few buyers, specialised use |
| Plot or land | 40 – 50% | Many lenders decline entirely |
The valuation gap
This is where expectations break. The lender appoints a valuer who works from documented comparable transactions in the area — and in most Indian markets, registered transaction values sit below actual market prices. A property you would sell for ₹1.2 crore may be valued at ₹95 lakh.
At 65% LTV, that is the difference between ₹78 lakh and ₹62 lakh. Plan on the conservative figure.
The second cap nobody mentions
LTV sets a ceiling; your income sets another. A ₹2 crore property at 65% LTV supports ₹1.3 crore — but only if your income can service the EMI on ₹1.3 crore. At 11% over fifteen years that is about ₹1.48 lakh a month, which needs a substantial and provable income.
Whichever cap is lower is what you get. Knowing which one is binding tells you what to fix: a longer tenure or a co-applicant solves an income constraint, and neither does anything about a valuation constraint.
What reduces LTV
- Unapproved construction or deviation from the sanctioned plan
- A long-standing or protected tenancy
- A location with a thin resale market
- Age and condition of the building
- Any ambiguity in the title — though this more often stops the loan than reduces it
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