LTV (Loan-to-Value)

A ratio used in mortgage lending that compares the loan amount to the appraised value of the property. While not an Italian-specific term, it’s commonly used by banks in Italy when granting mutui. For example, an LTV of 80% means the bank is lending 80% of the property’s value, requiring the borrower to provide a 20% down payment. Italian banks typically offer home loans up to around 60–80% LTV for non-resident foreign buyers (sometimes lower LTV for non-residents) and up to 80–95% LTV for Italian residents with stable income. A lower LTV (e.g. 50%) can sometimes secure better interest rates. If an appraisal comes in lower than the purchase price, the LTV is applied to that lower value, which can affect the loan amount. LTV matters also for ipoteca: banks often register a mortgage lien for 150%–200% of the loan amount, but that is a separate concept from LTV.