Loan-to-Value (LTV) Calculator
Compute the mortgage loan-to-value ratio from loan amount and property value, and the required down payment.
Input Data
Results
At a glance:LTV = loan amount ÷ property value (valuation) × 100%, measuring how much you borrow relative to the property's value — the core indicator for mortgage approval and leverage. LTV and down-payment % are two sides of one coin: down % = 100% − LTV; a 70% mortgage needs a 30% down payment. Higher LTV = more borrowed, less down, more leverage, more bank risk; in HK, >60% usually needs mortgage insurance with a premium. HKMA sets LTV caps by price/occupancy/first-time status; higher prices usually mean lower caps. LTV is also the negative-equity gauge — when valuation drops below the loan (actual LTV > 100%) it appears. Banks use valuation, not transaction price.
Formula
LTV = loan amount ÷ property value × 100%.
Down-payment % = 100% − LTV.
LTV > 100% (loan above valuation) means negative equity.
$$\text{LTV} = \dfrac{\text{Loan Amount}}{\text{Property Value}} \times 100\%$$$$\text{Down Payment \%} = 100\% - \text{LTV}$$How to Use
- Enter the mortgage loan amount (applied or outstanding).
- Enter the property market value or bank valuation.
- View the LTV instantly and infer the required down payment.
At a fixed valuation of HK$5,000,000, LTV, down-payment % and amount by loan amount
| Valuation (HK$) | Loan (HK$) | LTV | Down % | Down (HK$) |
|---|---|---|---|---|
| 5,000,000 | 3,000,000 | 60% | 40% | 2,000,000 |
| 5,000,000 | 3,500,000 | 70% | 30% | 1,500,000 |
| 5,000,000 | 4,000,000 | 80% | 20% | 1,000,000 |
| 5,000,000 | 4,500,000 | 90% | 10% | 500,000 |
Case Studies
Case 1: How a low valuation cuts the borrowable amount
Mr Wong buys at HK$5,500,000, planning a 70% mortgage. But the bank values only HK$5,000,000 (a 'low valuation').
Banks use valuation: 70% mortgage = 5,000,000 × 70% = HK$3,500,000, not the 3.85m from the price. Actual down = 5,500,000 − 3,500,000 = HK$2,000,000 (≈36.4% of price), much more than the expected 30%.
This shows: before signing, check the bank's valuation; if low, the difference must be made up in cash or you renegotiate with the seller. The 'valuation' is what binds, not the price.
Case 2: High-LTV mortgage and negative-equity buffer
A takes a 60% mortgage (LTV 60%), B a 90% mortgage (LTV 90%), both buying a HK$5m unit. A borrows 3m, B borrows 4.5m.
If prices later fall 15%, valuation drops to HK$4.25m. A's loan 3m is still below the new valuation — no negative equity; B's loan 4.5m exceeds 4.25m, actual LTV > 100%, B is in negative equity (owes HK$250k on paper).
This shows high-LTV mortgages have a low entry down payment but a thin buffer and weak downside resistance — more likely to go negative in a downturn. Balance down-payment capacity against risk buffer, and review LTV with the latest valuation periodically.
FAQ
What is the maximum LTV allowed in Hong Kong?
Caps are set by HKMA guidance and the Mortgage Insurance Programme, varying by price, owner-occupancy and first-time-buyer status. Generally higher prices mean lower basic caps; to exceed the basic cap ('high-LTV', lower down) you usually need mortgage insurance with a premium. Actual caps follow the bank and Mortgage Corporation's current rules.
Do banks use transaction price or valuation?
Banks use 'valuation', not your transaction price. If the valuation is below the price ('low valuation'), the borrowable amount shrinks accordingly and the difference must be made up in cash. Check the valuation with the bank before negotiating.
What is negative equity and how is it linked to LTV?
When prices fall and the valuation drops below the outstanding mortgage, LTV exceeds 100% — negative equity. High-LTV (low down) owners are more likely to fall into it in a downturn because the buffer is thin. Review LTV with the latest valuation periodically.
How are HK LTV caps set; cautions on high-LTV?
HK LTV caps are set mainly by the HKMA's supervisory guidance and the Mortgage Corporation's insurance programme, not a fixed number, but graded by price, owner-occupancy and first-time-buyer status. The broad principle: higher prices → lower basic caps; to exceed the basic cap (lower down) you usually join mortgage insurance and pay a premium (one-off or instalments, raising cost). Also, even within the cap, borrowers must pass the Debt Servicing Ratio (DSR) and stress test — at a hypothetical rate rise, the payment-to-income ratio must still qualify, often the real binding limit. Cautions: (1) caps and policy change with the market (past 'cooling measures' and later relaxations) — use the current rules; (2) high-LTV means low down but large loan, heavy monthly payment, high total interest, and thin downside buffer/negative-equity risk; (3) mortgage insurance adds cost. So choose high-LTV only after weighing down-payment ability, payment burden, risk tolerance and market, not just 'borrow the most'.
Why valuation not price; what if valuation is low?
Banks use 'valuation' not 'transaction price' for risk management: the collateral is the property, and an independent, objective value base is needed to measure how much loan it covers, not the buyer-seller agreed price (which may exceed fair value). So the bank commissions a valuation and computes LTV = loan ÷ valuation, ensuring recovery protection. When valuation < price ('low valuation'), the borrowable amount shrinks (cap × lower valuation, not higher price). Example: price 5.5m, 70% mortgage; if valuation only 5m, borrowable = 5m × 70% = 3.5m, down = 5.5 − 3.5 = 2m, far above the 30% expected. Responses: (1) check valuation with one or more banks before signing; (2) try other banks (valuations differ); (3) prepare extra cash or renegotiate; (4) valuations move with the market — a worse market between signing and approval can lower it too. Factor low-valuation risk into funding plans upfront.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.