What is the minimum Loan-to-Value (LTV) ratio on non-owner occupied residential rental properties?

The minimum Loan-to-Value (LTV) ratio on non-owner occupied residential rental properties is typically set at 80%. This means that a lender will generally allow a maximum mortgage amount that is 80% of the property's appraised value. This requirement is in place to mitigate risk for lenders, as properties that are not owner-occupied (like rental properties) can present higher risks due to factors such as variable rental income and potential vacancies.

By requiring a minimum LTV of 80%, lenders also ensure that the borrower has a significant equity stake in the property, which can lead to more responsible financial management. Higher equity often indicates that the borrower is less likely to default on the loan. In contrast, options reflecting lower LTV ratios, such as 60% or 70%, might be more applicable to different types of loans or property categories, while 90% does not align with typical lending standards for non-owner occupied properties.