# Loan to value ratio in South Africa: what LTV means for your home loan - Canonical URL: https://bond.co.za/guides/loan-to-value-ratio-south-africa - Author: Neil B - Published: 2026-11-09 - Last updated: 2026-11-09 1. [Home](https://bond.co.za/) 3. [Guides](https://bond.co.za/guides) 5. [Affordability & credit](https://bond.co.za/guides/affordability-and-credit) 7. Loan to value ratio Affordability & credit bond.co.za's answer: the loan-to-value ratio (LTV) is your home loan as a percentage of the property's value. Borrow **R1 350 000** on a **R1 500 000** home and your LTV is **90%** — the deposit is the missing 10%. Lower LTV means lower bank risk, and typically a sharper rate. - The formula: loan amount ÷ property value × 100 = LTV percentage. The bank uses the lower of the purchase price and its own valuation. - Why it matters: across the major banks, home-loan offers typically land between prime minus 1.0% and prime plus 2.0% — and your deposit/LTV is one of the drivers of where in that band you land. - A deposit is the direct lever: every 10% deposit cuts the LTV by 10 points — see the worked table below for a **R1 500 000** property at today's prime of **10.75%**. - Not the same thing: LTV describes the loan against the property; the [deposit](https://bond.co.za/guides/home-loan-deposit-south-africa) is the cash that shrinks it. By [Neil B](https://bond.co.za/expert) · Checked against published primary sources · Published 2026-11-09 · Last verified 2026-11-09 [Check what you could qualify for](https://bond.co.za/#qualify)[Model your repayment](https://bond.co.za/bond-calculator) Rate source: South African Reserve Bank (SARB)Rate verified 23 Sept 2026Pricing band updated 03 Oct 2026 Rate your bond is priced off23 Sept 2026 10.75%Prime lending rate today Your offer will be prime plus or minus — the offset depends on your credit profile, deposit/LTV and affordability. Prime moves at every MPC decision, next one is 19 Nov 2026. Source: [South African Reserve Bank (SARB) MPC statement](https://www.resbank.co.za/en/home/publications/publication-detail-pages/statements/monetary-policy-statements/2026/september). Last verified 23 Sept 2026. Loan amountR 1 500 000 Term20 years Interest rate10.75% (prime) Monthly repaymentR 15 228 Total repaid over 20 yearsR 3 654 824 Excludes bond registration and transfer costs. A quarter-percent rate difference on this loan changes the repayment by R 254 a month — which is why offers are worth comparing. [See the full bond calculator](https://bond.co.za/bond-calculator) ## What is the loan to value ratio on a home loan? **The loan-to-value ratio (LTV) is the size of your home loan expressed as a percentage of the property's value — a measure of how much of the property the bank is financing, and therefore how much risk the bank carries.** Borrow R1 350 000 against a R1 500 000 property and the LTV is 90%: the bank funds 90 cents of every rand the property is worth. The other 10% is your deposit. That split is the whole deal in miniature: the more the buyer puts in, the less the bank must recover if the loan goes bad and the property has to be resold. South African banks use LTV both to decide whether to lend at all and to help set the interest rate they quote — which is why it appears in almost every approval conversation, even though most buyers have never calculated it. ## How do you calculate LTV? **LTV = loan amount ÷ property value × 100.** On a R2 000 000 property with a R1 600 000 bond, the LTV is R1 600 000 ÷ R2 000 000 × 100 = 80%. One catch: the bank measures the loan against the lower of the purchase price and its own valuation, so if the valuation comes in below what you agreed to pay, your effective LTV rises and you may need extra cash to close the gap. The table shows the same **R1 500 000** property bought with different deposits, with the monthly repayment at today's prime of **10.75%** (verified 23 Sept 2026) over a 20-year term. Every repayment is an illustration at one rate — offers move above or below prime depending on your profile. | Deposit | Loan amount | LTV | Monthly repayment\* | | --- | --- | --- | --- | | R0 (100% bond) | R1 500 000 | 100% | R15 228 | | R150 000 (10%) | R1 350 000 | 90% | R13 706 | | R300 000 (20%) | R1 200 000 | 80% | R12 183 | | R450 000 (30%) | R1 050 000 | 70% | R10 660 | \*Illustrative only: prime 10.75% (effective 25 Sept 2026), 20-year term, capital and interest, no fees included. Your quoted rate will differ. Reading the table the practical way: a 10% deposit cuts the repayment by about **R1 523 a month** at prime — but that is only the loan-size effect. The rate effect compounds it, because the smaller, lower-LTV loan also tends to attract better pricing. ## What is a good LTV for a home loan in South Africa? **Lower is always stronger, but there is no official threshold: South African banks lend across the whole range — 100% bonds exist for qualifying buyers — and score your LTV together with your credit record, affordability and the property itself.** The working picture most buyers use: around 90% is a common approved level; 80% or below puts you in the bank's most comfortable zone; 100% is possible but the hardest to secure and typically the most expensive. Two products bend the rule. A [100% home loan](https://bond.co.za/guides/100-percent-home-loan) removes the deposit for buyers who qualify, and a [costs-included home loan](https://bond.co.za/guides/costs-included-home-loan) can finance part of the upfront costs too — effectively lending above 100% of the purchase price to certain buyers. Neither is guaranteed: at that LTV the bank is carrying all the risk, so every other part of your profile has to carry its weight. ## Does a lower LTV get you a better interest rate? **Yes, it helps — deposit/LTV is one of the drivers banks price on, alongside your credit profile and affordability — but no bank quotes a rate by LTV alone.** Across the major-bank panels that bond originators submit to, offers typically land between prime minus 1.0% and prime plus 2.0%. The table shows what that band means on the same R1 500 000 loan over 20 years. | Rate assumption | What it reflects | Monthly repayment\*\* | | --- | --- | --- | | Prime −1.0% (9.75%) | Strong profile: solid credit record, substantial deposit / low LTV | R14 228 | | Prime (10.75%) | Typical approved pricing, no strong concession | R15 228 | | Prime +2.0% (12.75%) | Weaker or thin credit file, little or no deposit / high LTV | R17 307 | \*\*Illustrative band, not a quote: Home-loan offers across the major SA banks typically land between prime minus 1.0% and prime plus 2.0%, depending on credit profile, deposit and loan-to-value. Individual banks may quote outside this band; it is illustrative, not a quote. Source: bond.co.za illustration of published major-bank pricing, cross-checked with ooba Home Loans rate-concession reporting, updated 03 Oct 2026; prime verified 23 Sept 2026. The two ends of that band differ by about **R3 079 a month** — roughly **R739 000 over 20 years** on the same loan. That spread is why deposit size is worth real money, and it is also why applying to several banks matters: ooba reports an average rate concession of about 0.67% below prime across the bonds it registers (as of 03 Oct 2026), because banks competing for the same deal quote sharper than banks that get one look at it. Our [negotiating your interest rate](https://bond.co.za/guides/can-i-negotiate-my-home-loan-interest-rate) guide covers that side of the pricing. ## How do you lower your LTV? **Four levers move the LTV down: a bigger deposit, a less expensive property, a subsidy that shrinks the loan you need, and paying into the bond after registration.** Each one works the same way — it puts more of the property's value between the bank's loan and nothing. - **Save a deposit — even 10%.** The [deposit guide](https://bond.co.za/guides/home-loan-deposit-south-africa) shows what South African buyers actually put down and how to build it. - **Target the price band, not the dream band.** On the same cash, a cheaper property means a lower LTV on day one — which is often the difference between a decline and an approval. Our [how much home loan can I get](https://bond.co.za/guides/how-much-home-loan-can-i-get) guide shows how banks set the ceiling. - **Check the First Home Finance subsidy.** For qualifying first-time buyers in the defined income band, the subsidy reduces the loan you need to borrow — an effective LTV cut the bank sees immediately. The [First Home Finance (FLISP)](https://bond.co.za/guides/flisp-first-home-finance) guide covers eligibility. - **After registration, pay extra.** Every rand into the bond moves the LTV down and builds equity you can later access — the [access bond](https://bond.co.za/guides/access-bond-south-africa) guide explains the mechanics. ## LTV and the deposit — what's the difference? **They are two views of the same money: the deposit is the cash you bring; the LTV is what the resulting loan looks like as a percentage of the property.** A R150 000 deposit on a R1 500 000 purchase is "a 10% deposit" to you and "a 90% LTV application" to the bank — the same deal, described from opposite ends. The distinction matters because banks price on risk, and LTV is how risk is expressed to them. Two buyers with the same deposit do not sit at the same LTV if the properties differ: R150 000 on a R1 000 000 home is 85% LTV, while the same cash on a R2 000 000 home is 92.5%. If you are working out how much cash to raise before applying, start with the [deposit guide](https://bond.co.za/guides/home-loan-deposit-south-africa) — it works through the savings side in detail. ## Sources and assumptions in this guide The prime lending rate used in every table — **10.75%, effective 25 Sept 2026** — comes from the South African Reserve Bank (SARB) MPC statement, verified 23 Sept 2026, and is variable: it moves at every MPC decision, next one 19 Nov 2026. The rate band (prime minus 1.0% to prime plus 2.0%) is an illustration of published major-bank pricing cross-checked with originator reporting, updated 03 Oct 2026 — individual banks may quote outside it. The average concession figure (0.67% below prime) is ooba Home Loans reporting, as of 03 Oct 2026. Every repayment in this guide is a standard capital-and-interest calculation at the stated rate over a 20-year term with no fees included — an illustration of the maths, not a quote, offer or prediction. Bank valuation practice (measuring the loan against the lower of purchase price and valuation) describes standard practice. Approval at any LTV depends on the full assessment: your credit record, affordability under the National Credit Act, and the property itself. Nothing here is a guarantee of approval or of a rate. ### See your own numbers, not just the formula Two questions, no contact details — an estimated bond range and repayment at today's prime. Roughly what price range are you looking at? How much deposit have you saved so far? FAQ ## Loan to value ratio: FAQs What does loan to value ratio mean on a home loan?+ It is the size of your home loan expressed as a percentage of the property’s value. Borrow R1 350 000 on a R1 500 000 home and the loan-to-value ratio is 90%. The remaining 10% — R150 000 in that example — is your deposit. The higher the percentage, the more the bank is lending relative to the property, and the more risk the bank carries if the property has to be resold. How do I calculate the LTV on my bond?+ Divide the loan amount by the property’s value and multiply by 100. On a R2 000 000 property with a R1 600 000 bond: R1 600 000 ÷ R2 000 000 × 100 = 80% LTV. Use the lower of the purchase price or the bank’s own valuation — if the bank values the property below what you agreed to pay, the loan is measured against the bank’s lower figure, and your effective LTV rises. What is a good LTV ratio in South Africa?+ The lower the better, from the bank’s point of view. Around 90% is a common approved level for qualifying buyers; 80% or below puts you in the strongest pricing position; 100% (no deposit) is possible but harder to secure and typically priced at the top of the range. There is no official “good” threshold — each bank scores your whole profile, and the LTV is one input among credit record, affordability and the property itself. Can I get a home loan with 100% LTV?+ Yes — some lenders offer 100% home loans (no deposit) to qualifying buyers, and some products allow part of the upfront costs to be financed too. It is never guaranteed: approval at 100% depends on a strong credit record, proven affordability and the bank’s appetite at the time. The full picture is in our 100% home loan guide. Does a lower LTV really get a lower interest rate?+ It supports a lower rate, but it is never automatic. Across the major banks, offers typically land between prime minus 1.0% and prime plus 2.0%, and deposit/LTV is one of the drivers alongside your credit profile and affordability. A bigger deposit means the bank risks less, which typically supports sharper pricing — but the rate you are quoted is always the bank’s call, and the only way to see your actual number is to apply and compare offers. What happens if my LTV is too high?+ The bank may decline the loan, approve a smaller amount so that you effectively bring a bigger deposit, or approve at a less favourable rate. If you are declined at 100%, the practical fixes are to save a deposit (even 10% changes the risk math), target a less expensive property, or use a subsidy such as First Home Finance to shrink the loan you need. Where those are not realistic yet, strengthening your credit record first is usually the faster path to approval. ## Informational disclaimer This guide is for information only and is not financial advice. The repayments shown are standard capital-and-interest illustrations at the stated rates over a 20-year term — they are not quotes, offers or predictions, and exclude fees, insurance and any rate concession or penalty the bank may apply. The prime lending rate cited (10.75%, verified 23 Sept 2026) is variable and changes at SARB MPC meetings. Home-loan approval and pricing depend on each bank's assessment of your credit record, affordability, the deposit/LTV and the property, and no approval or rate is guaranteed. Take advice on your specific circumstances before acting. Keep reading ## More in affordability & credit The most recently updated guides in this category. [Affordability & credit](https://bond.co.za/guides/affordability-and-credit) [Home loan on a R30 000 salary](https://bond.co.za/guides/home-loan-on-r30000-salary) A R 30 000 gross salary supports a R 9 000 instalment under the 30% rule — about R 886 500 at 10.75% prime over 20 years. A deposit or a co-applicant lifts the price you can offer for. Updated 14 Nov 20268 min read [Affordability & credit](https://bond.co.za/guides/affordability-and-credit) [Home loans if you are blacklisted](https://bond.co.za/guides/home-loan-blacklisted-south-africa) “Blacklisted” is not a legal status in South Africa — it means your credit record carries defaults or judgments, which makes mainstream bond approval very unlikely until they are settled or rescinded. This guide covers what banks actually check, how to clear listings, debt-review exit and rebuild steps. Updated 14 Nov 20269 min read [Affordability & credit](https://bond.co.za/guides/affordability-and-credit) [How much home loan can I get?](https://bond.co.za/guides/how-much-home-loan-can-i-get) On a R 30 000 gross salary the 30% rule allows a R 9 000 instalment — about R 886 500 at 10.75% prime over 20 years. Salary tables from R20 000 to R100 000, gross vs net, deposit and term. Updated 02 Nov 20269 min read [Browse all affordability & credit guides →](https://bond.co.za/guides/affordability-and-credit) Know your numbers before you apply ## Find the LTV — and the loan — that fits your profile Work out what you could borrow at today's prime, then let that number lead the conversation with the banks. [Check what you could qualify for](https://bond.co.za/#qualify)[Model your repayment](https://bond.co.za/bond-calculator) > This is the Markdown version of [https://bond.co.za/guides/loan-to-value-ratio-south-africa](https://bond.co.za/guides/loan-to-value-ratio-south-africa); that HTML page is the canonical version of this content.