Loan-to-Value Ratio (LTV)
The ratio between a mortgage loan amount and the appraised or purchase value of a property, expressed as a percentage, used by banks to size the required down payment and assess lending risk.
Сфера дії: Польща.
Визначення
The loan-to-value ratio (LTV) is calculated by dividing the mortgage loan amount by the lower of the property's purchase price or its bank-appraised value, then expressing the result as a percentage. An LTV of 80% means the bank is financing 80% of the property's value, with the remaining 20% coming from the buyer's own funds as a down payment.
In Poland, LTV limits are governed in practice by Recommendation S issued by the Polish Financial Supervision Authority (Komisja Nadzoru Finansowego, KNF). Most banks cap standard mortgages at 80% LTV, though loans up to roughly 90% LTV are available if the borrower takes out additional low-cash-contribution insurance covering the bank's extra risk on the uninsured portion.
LTV directly affects the interest rate margin a bank offers: a lower LTV (a larger down payment) signals lower risk to the lender and is typically rewarded with a smaller margin, while an LTV near the regulatory ceiling usually comes with a higher margin or a mandatory insurance premium added to the loan cost.
Приклади
A buyer purchases an apartment appraised at 600,000 PLN with a 480,000 PLN mortgage — the LTV is 80%, and the buyer must cover the remaining 120,000 PLN from savings.
A first-time buyer with only a 10% down payment secures a 90% LTV loan, but the bank adds a low-cash-contribution insurance premium to the monthly installment until the outstanding balance falls back under 80% LTV.
Як це впливає на купівлю та продаж
For buyers, LTV determines how much cash must be available before an offer is even realistic — a seller who insists on a fast, financing-contingency-free closing should ask early whether the buyer's expected LTV keeps them within a bank's standard approval range or pushes them into the higher-margin, insurance-loaded tier. For sellers, a buyer whose financing depends on an LTV near 90% carries more appraisal risk: if the bank's valuation comes in below the agreed price, the buyer may need to renegotiate or find extra cash to close the gap.
