Mortgage lending value, loan-to-value ratio - What is that?

What does mortgage lending value mean? A simple example: Your property has a certain purchase price; for example, 300,000 euros. You have, for example, 60,000 euros in additional equity. The bank would therefore have to finance 240,000 euros for you. The mortgage lending value here is therefore 80% of the purchase price.

The mortgage lending value therefore indicates the percentage of the purchase price that the bank must finance. Other figures are also included in this calculation: Do you have equity capital or do you also have to finance the ancillary land acquisition costs? The higher the loan-to-value ratio, the higher the interest you have to pay. The conditions are therefore less favorable the higher the mortgage lending value.

If you want financing without equity or financing without equity including ancillary land acquisition costs, this corresponds to a loan-to-value of 100% to 130%. As a result, the interest rate for your real estate financing is usually relatively high. If the mortgage lending value is lower and is around 50% to 100%, then you will pay less interest on your construction financing.

Within our concept solution: "Equity of the future", we show you how you are not necessarily worse off in terms of conditions.