Decoding the Loan-to-Value (LTV) Ratio:
The Loan-to-Value (LTV) ratio, a cornerstone of mortgage borrowing, gauges your borrowing compared to the property’s value. Examine this ratio through a practical lens:
LTV Ratio = (Loan Amount / Property Value) * 100
For instance, consider a property valued at AED 2,000,000. Adhering to the UAE’s maximum LTV of 80%, you can secure a mortgage of up to AED 1,600,000. This judicious allocation mitigates lender risk and influences loan terms, aligning with your financial profile.