What Is Loan-to-Value Ratio When Refinancing Home Philippines?

The Loan-to-Value (LTV) ratio is a percentage that expresses how much of your property's current appraised value is covered by your outstanding loan balance. In refinancing, it tells the bank how much risk they are taking on: a lower LTV means more equity in your home, which is less risky for the lender.

For example, if your home is appraised at 5,000,000 and you still owe 3,500,000 on your mortgage, your LTV ratio is 70%. This is calculated simply as (3,500,000 ÷ 5,000,000) × 100 = 70%. Philippine banks generally view anything at or below 80% as an acceptable LTV for refinancing, with lower ratios unlocking better rates and terms.

The formula is straightforward:

LTV (%) = (Outstanding Loan Balance ÷ Current Appraised Property Value) × 100

Here are three quick examples based on common loan scenarios in the Philippines:

• Conservative: Owe 1,200,000 on a property worth 2,000,000 → LTV = 60% ✅ Excellent
• Moderate: Owe 4,000,000 on a property worth 5,500,000 → LTV = 72.7% ✅ Good
• Tight: Owe 7,500,000 on a property worth 8,500,000 → LTV = 88.2% ⚠️ May be difficult

Note that banks use the current appraised value — ordered during your application — not the original purchase price. If your property has appreciated significantly since you bought it, your LTV may be much better than you expect.

Most Philippine banks will refinance a home loan up to a maximum LTV of 80%. This means your outstanding loan must not exceed 80% of your property's current appraised value. Some banks offer up to 90% in select cases, but this is the exception rather than the rule and typically comes with higher rates.

Here's a general guide to how LTV tiers affect approval across major lenders like BDO, BPI, Metrobank, Security Bank, and RCBC:

• 60% and below: Easiest approval, best rates available (potentially as low as 5.99% p.a. through Nook)
• 61%–75%: Strong approval likelihood, competitive rates
• 76%–80%: Generally still approvable, rates may be slightly higher
• 81%–90%: Limited lender options, stricter documentation required
• Above 90%: Very difficult to refinance through most private banks

Pag-IBIG (HDMF) has its own LTV guidelines which can sometimes be more flexible — see our guide on refinancing from Pag-IBIG to private banks for more detail.

Yes — significantly. LTV ratio is one of the primary factors Philippine banks use to price their refinancing rates. The logic is simple: a lower LTV means more equity and less risk for the bank, so they reward you with a lower rate.

To illustrate, consider a homeowner refinancing a 4,000,000 loan. If their property is appraised at 6,000,000 (LTV of 66.7%), they are likely to qualify for the most competitive offers. If a different borrower has the same loan amount but their property is only worth 4,800,000 (LTV of 83.3%), they will face fewer lender options and likely a higher rate.

The difference of even half a percent on a 4,000,000 loan over 20 years can mean paying roughly 200,000 to 300,000 more in interest over the life of the loan. This is why improving your LTV — even slightly — before applying can pay off significantly. Through Nook, borrowers with strong LTV ratios have accessed rates starting from 5.99% p.a.

When you apply to refinance through a bank (or through Nook), the bank will commission a formal property appraisal conducted by an accredited appraiser. This is the value the bank will use — not your own estimate, not the Zonal Value from the Bureau of Internal Revenue (BIR), and not the original purchase price.

That said, you can get a rough idea beforehand by:

• Checking recent sale prices of similar properties in your area (Lamudi, Property24, or local brokers)
• Requesting an informal valuation from a licensed real estate broker
• Reviewing your property's assessed value at your local city assessor's office (note: this is typically much lower than market value)

Keep in mind that formal bank appraisals in the Philippines typically cost between 3,000 and 8,000 pesos and are usually charged to the borrower. However, when you apply through Nook, we guide you through the entire process and help you understand how the appraisal result affects your refinancing options before you commit to anything.

It depends on how high. If your LTV is between 80% and 90%, you still have some options, but they narrow considerably. You may need to approach lenders that have more flexible underwriting or consider government-backed options like Pag-IBIG Fund. Above 90% LTV, most private banks in the Philippines will decline a standard refinancing application.

If you're in this situation, there are a few strategies to consider:

• Make additional principal payments before applying to bring your balance down
• Wait for property appreciation — particularly in high-growth areas like BGC or Ortigas, property values can increase significantly over just a few years
• Request a formal appraisal — if your property has been upgraded or the market has moved up, the appraisal may come back higher than you expect
• Explore Pag-IBIG refinancing — HDMF sometimes accommodates higher LTVs than private banks

If your credit history is also a concern alongside a high LTV, our guide on refinancing with bad credit in the Philippines covers strategies that may help your overall application.

Not automatically — but your options become more limited. Banks set maximum LTV thresholds as policy, but there is sometimes flexibility depending on the borrower's overall financial profile. A borrower with an LTV of 82% but an excellent credit score, stable high income, and a long-standing relationship with a bank may still receive consideration that a standard applicant would not.

Additionally, the appraisal outcome matters enormously. Philippine property values in many urban areas have risen sharply over the past five to ten years. A homeowner who bought in 2015 may have an LTV that looks unfavorable on paper based on the original purchase price, but once the bank's appraiser visits the property and values it at current market rates, the actual LTV may fall well within acceptable limits.

This is one of the reasons working with a mortgage broker like Nook is valuable — we know which banks have more flexible appetite at any given time, and we can help you present your application in the strongest possible light across multiple lenders simultaneously.

The formula is the same, but banks often apply stricter LTV limits for condominium units compared to houses and lots. While a house and lot may be refinanced up to 80% LTV, many banks cap condominium refinancing at 70% LTV — and some go as low as 60% for high-rise units, particularly in developments with a large number of unsold units or aging buildings.

The reason is risk: land retains and typically grows in value, whereas a condo unit's value is more tied to the building's condition, the developer's reputation, and floor location. Banks also consider the remaining years on the master title and the building's age when assessing condo collateral.

For condo owners in premium locations like Bonifacio Global City, LTV limits may be more generous because of demonstrated demand and property liquidity. If you own a condo in BGC and are considering refinancing, our guide to refinancing a condo loan in BGC covers what to expect from local appraisals and lender appetite in that specific market.

Yes — this happens when a borrower does a cash-out refinance, where the new loan amount is higher than the existing outstanding balance. The difference is released to the borrower as cash, often used for home improvements, education, or business capital. A higher new loan on the same property means a higher LTV.

For example: you owe 2,500,000 on a property worth 5,000,000 (LTV of 50%). You refinance for 3,500,000, taking out 1,000,000 in cash. Your new LTV is 70% — still within most banks' limits and potentially still at a competitive rate.

Whether this is a good idea depends entirely on what you do with the funds and whether the overall cost is justified. If you're using the cash to renovate, the property value increase may offset the higher debt. Nook's brokers can help you model out these scenarios so you understand the full financial picture before deciding — with no obligation and no fee to you.

There are two levers you can pull: reduce your loan balance or increase your property's appraised value (or both). Here are practical steps Filipino homeowners take to improve their LTV before refinancing:

• Make lump-sum principal payments: Use a bonus, inheritance, or savings to reduce your outstanding balance before applying. Even reducing the balance by 200,000 to 500,000 can move you into a better LTV tier.
• Invest in property improvements: Renovations that increase appraised value — new flooring, updated kitchen and bathrooms, roofing — can improve your LTV if they raise the formal appraisal result.
• Time your application strategically: In appreciating markets, waiting 6–12 months can result in a meaningfully higher appraisal, especially in growth areas.
• Ensure your property is in good condition before appraisal: Appraisers note deferred maintenance. A well-maintained property typically appraises higher than a neglected one of similar size.
• Get multiple lenders assessed: Different banks use different accredited appraisers, and results can vary. A mortgage broker like Nook can help you navigate this process across multiple banks at once.

Improving your LTV by even 5–10 percentage points can unlock meaningfully lower rates and save you hundreds of thousands of pesos over the life of your loan.