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ArticlesLoan-to-Value ratio (LTV) compares the mortgage amount with the property value used for lending purposes. A higher LTV means the lender is financing a larger share of the property and the buyer is contributing a smaller share from their own funds. The CBUAE sets maximum mortgage LTV ratios by borrower and property category; banks can apply lower limits based on their own credit and risk policies.
LTV formula
LTV = mortgage amount ÷ property value × 100.
If a property is valued at AED 1,000,000 and the mortgage is AED 800,000, the LTV is 80%. The remaining AED 200,000 represents the buyer’s equity contribution before considering transaction costs and other fees.
Current CBUAE maximum LTV ratios
Under the current mortgage regulations, UAE nationals buying a first owner-occupied home can have a maximum LTV of 85% when the property value is AED 5 million or less, and 75% when the value is above AED 5 million. For expatriates buying a first owner-occupied home, the maximum is 80% when the property value is AED 5 million or less and 70% when the value is above AED 5 million.
For second or subsequent homes and investment property, the maximum is 65% for UAE nationals and 60% for expatriates. For off-plan property, the maximum LTV is 50% across categories under the regulation.
These are regulatory maximums. A bank may approve a lower LTV based on the property, borrower, valuation and its lending policy.
How LTV affects your down payment
The difference between the property value and the financed amount generally has to be funded by the buyer. CBUAE mortgage rules state that the required down payment should come from the borrower’s own resources and not from other borrowing such as personal loans or credit cards.
Also budget separately for valuation, registration, insurance and other purchase costs because the down payment is not the only cash requirement in a property transaction.
Which property value is used?
Lenders rely on their approved valuation process. If the valuation differs from the agreed purchase price, the bank’s eligible financing amount can change because the LTV must remain within the applicable limit.
This is why a buyer should avoid assuming that a pre-agreed purchase price automatically determines the final mortgage amount.
LTV and mortgage risk
A lower LTV means the borrower contributes more equity and the lender finances a smaller proportion of the property value. A higher LTV leaves a smaller equity cushion if property values fall.
For that reason, LTV is one of several controls used alongside DBR, income, credit history and property assessment.
LTV is not the same as affordability
You can be within the LTV limit and still fail the affordability assessment. DBR measures the relationship between debt commitments and income, while LTV measures the relationship between the mortgage and property value.
A mortgage application generally needs to satisfy both property-related and borrower-related criteria.
Frequently asked questions
What is the LTV formula?
Mortgage amount divided by property value, multiplied by 100.
What is the maximum first-home LTV for expatriates in the UAE?
Under the current CBUAE mortgage rules, the maximum is 80% for a first owner-occupied property valued at AED 5 million or less, and 70% when the value is above AED 5 million.
What is the maximum first-home LTV for UAE nationals?
The current maximum is 85% for a first owner-occupied property valued at AED 5 million or less, and 75% when the value is above AED 5 million.
What is the LTV for off-plan property?
The CBUAE mortgage regulations set a maximum LTV of 50% for off-plan property across borrower categories.
Can a bank offer less than the maximum LTV?
Yes. The regulatory figure is a maximum. Banks can apply lower LTVs based on credit policy, valuation and risk.
Can I borrow the down payment using a personal loan?
CBUAE mortgage rules state that the down payment should be drawn from the borrower’s own resources and not from other sources of borrowing, including personal loans or credit cards.