LTV / Loan-to-value

Ratio between the loan amount and the property value.

The LTV (Loan-to-Value) or advance rate expresses the ratio between the mortgage amount and the property value. In Switzerland, the maximum LTV is generally 80%.

Example: for a property worth CHF 1,000,000, the maximum mortgage is CHF 800,000 (80% LTV). The remaining CHF 200,000 must be covered by equity.

The portion between 67% and 80% of the property value constitutes the 2nd mortgage rank, which must be amortised within a maximum of 15 years (or before retirement).

A lower LTV (e.g. 60%) generally allows you to obtain better rate conditions, as the risk for the bank is lower.

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