Loan Against Property: LTV, Valuation and Eligibility

LTV is a ratio, not an approval

Loan-to-value compares a proposed loan with a property value accepted for that assessment. A lender still assesses borrower eligibility and the property. ICICI Bank’s published property-loan information ties available borrowing to both property value and eligibility. The owner’s expected sale price should not be treated as the lender’s accepted valuation.

A simple worked example

A ₹12 crore loan divided by an accepted property value of ₹20 crore produces an illustrative LTV of 60%. This arithmetic does not establish that a lender will approve ₹12 crore or accept ₹20 crore as the value. Legal checks, property type, existing charges and repayment capacity can change the outcome. There is no universal valuation haircut or LTV percentage for all commercial assets.

Prepare both the property file and the borrower file

• Identify the legal owner, proposed borrower and any differences between them. Record existing mortgages and proposed use of funds.
• Assemble the title chain and available approved plans, permissions, occupancy/completion evidence, tax records and lease documents as applicable. Ask the lender’s legal adviser for its exact requirements.
• Prepare financial statements, tax records, bank statements and existing debt details requested for repayment assessment.
• For leasehold industrial property, check the lease and relevant authority’s mortgage/transfer conditions with the lender’s legal team. Avoid assuming a fixed residual-tenure rule applies everywhere.

Is lease rental discounting the same as LAP?

They are related secured-finance structures, but the assessment can differ. Ask how rental cash flow, lease terms, tenant risk and payment routing will be assessed. Do not compare a rental-income eligibility calculation directly with a property-value LTV ratio.

Does low LTV guarantee the lowest rate?

No. Pricing and approval depend on the lender’s assessment and terms. Compare the complete offer, including fees, reset conditions and repayment obligations.

Discuss a ₹10 crore-plus requirement

CreditCares provides loan consultancy, with a Mumbai head office and Kolkata corporate office. For the scope of assistance, see our Loan Against Property service or request a consultation. Use the calculator for illustrations only.