Loan-to-value ratio

The loan-to-value ratio (LTV) is the ratio between the mortgage amount and the property's value. In Belgium, the National Bank (NBB) has set prudential expectations for banks. For an owner-occupied home, the threshold is 90%: 35% of new loans to first-time buyers may exceed it (of which at most 5% above 100%), against 20% for other buyers, without going above 100%. For a buy-to-let investment, the threshold is 80%, with a tolerance of 10% of loans, without going above 90%. These expectations are not a law: a bank may deviate from them if it explains why. A lower LTV requires a larger down payment but often gives access to a better rate.