(Loan-to-Value (LTV))

The LTV, or Loan-to-Value ratio, indicates the ratio of the loan to the value of the property. In Germany banks will use the collateral value as the property value. The lower the LTV the less risky a bank considers a loan. Therefor they offer you a better interest rate for a loan with a lower LTV. You can reduce the LTV by increasing the downpayment.  



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