Laenuväärtus

Laenuväärtus, a term originating from Estonian, translates to loan-to-value (LTV) in English. It is a financial metric used by lenders to assess the risk associated with a mortgage loan. The laenuväärtus represents the ratio of the loan amount to the appraised value of the property being purchased. For example, if a property is valued at 100,000 euros and a borrower seeks a loan of 80,000 euros, the laenuväärtus would be 80%.

Lenders use laenuväärtus as a primary factor in determining loan approval and the terms of the mortgage. A lower laenuväärtus generally indicates a lower risk for the lender, as the borrower has a larger equity stake in the property. This can lead to more favorable interest rates and loan conditions for the borrower. Conversely, a higher laenuväärtus signifies greater risk for the lender, as the borrower has less equity. This may result in stricter lending criteria, higher interest rates, or even loan denial.

Regulatory bodies often set maximum limits for laenuväärtus to ensure financial stability and prevent excessive risk-taking by both lenders and borrowers. For instance, a common maximum laenuväärtus might be set at 85% or 90%, meaning the borrower must provide at least 10% or 15% of the property's value as a down payment. Understanding one's potential laenuväärtus is crucial for prospective homebuyers when planning their mortgage application and assessing their borrowing capacity.