Loan Against Property LTV and Tenure in India: Limits by Property Type for Business Owners
Loan against property LTV and tenure in India are set by each lender, not RBI, which caps LTV only for housing, gold, silver and share loans. Lender pages checked on 1 November 2026 show maximum LTVs of 60% to 75% for residential and 50% to 60% for commercial property, and tenure usually up to 15 years.
Most business owners ask two numbers before anything else on a loan against property (LAP): how much of the property's value a lender will advance, and for how many years. This guide answers both for residential, commercial and industrial property, shows which limits come from RBI and which from lender policy, and works through one owner's file with the age, cash-flow and rent tests that actually decide the amount.
Loan against property LTV and tenure: the short answer
- There is no RBI cap on LTV for a business LAP. RBI fixes maximum loan-to-value ratios for individual housing loans (75% to 90%, by loan size) and for loans against gold, silver and listed shares. A loan against property for any other purpose is a non-housing loan, so each lender sets its own LTV in its own credit policy.
- Published lender limits sit in a band. On the public LAP and rent-backed loan pages of banks, NBFCs and a housing finance company that we checked on 1 November 2026, the highest advertised LTV was 60% to 75% for residential property and 50% to 60% for commercial property. None published a separate figure for industrial property.
- Tenure is usually up to 15 years. Most pages we checked cap a LAP at 15 years; one foreign bank page allows up to 20. Lease rental discounting (LRD) is usually capped at 10 years or the remaining lease, whichever is shorter.
- Your age caps the tenure. Most pages we checked want the loan repaid by 65 to 70 years of age.
- The final amount is the smallest of three tests: LTV on the lender's own valuation, what your cash flows can repay, and how much the tenure your age allows can support.
The ranges above are what lenders publish as maximums, not what any one file will get. Our loan against property guide covers how LAP works end to end, and the LAP vs business loan comparison covers cost. This guide covers only the limits.
What do the key terms mean?
| Term | Plain meaning |
|---|---|
| LTV (loan to value) | The loan as a percentage of the property's value. A ₹60 lakh loan on a property valued at ₹1 crore is 60% LTV. |
| Lender's valuation | The value fixed by the lender's empanelled valuer. Some lenders use a realisable value, which can be lower than the price you expect. |
| Tenure | The repayment period of the loan, in months or years. |
| Age at maturity | Your age on the date of the last EMI. Lenders cap it, so it limits tenure. |
| Self-occupied property | Property you or your business use. The loan is repaid from business income. |
| Rented property | Property let to a tenant. The rent can count as income for a LAP, or support an LRD. |
| LRD (lease rental discounting) | A loan against future rent from a let property, repaid from that rent, with the property mortgaged and the rent assigned to the lender. |
| Commercial real estate (CRE) | RBI's category for loans whose repayment depends mainly on rent or sale of a property. Lenders track and limit it separately under RBI's rules. |
LTV and tenure by property type
| Property type | Highest LTV on public lender pages (1 Nov 2026) | Typical maximum tenure | What drives the limit |
|---|---|---|---|
| Residential, self-occupied | 60% to 75% | Up to 15 years, one page up to 20 | The highest LTV band on the pages we checked. One public sector bank page steps LTV down from 65% to 60% for loans above ₹1 crore. |
| Residential, rented | Within the residential band | Up to 15 years | Rent may be counted as income. Expect to show the lease and the tenant's details. |
| Commercial, self-used (shop, office) | 50% to 60% | Up to 15 years | Valuation depends on location and use. Business income repays the loan. |
| Commercial, rented | 50% to 60% as a LAP | Up to 15 years as a LAP | Can be financed as LRD instead, sized on the rent rather than the value. |
| Industrial (factory, warehouse) | No separate figure published | Up to 15 years on pages that accept it | Accepted on fewer of the pages we checked and valued case by case. Expect a closer look at title, land use and resale. |
| Vacant plots and under-construction property | Often not accepted | Shorter where accepted | One page we checked excludes both; one housing finance company page offers plot loans for up to 10 years. |
| LRD on a let commercial property | Capped by a share of discounted rent and a share of value | Up to 10 years or the remaining lease, whichever is shorter | Tenant quality, lease lock-in and the rent net of tax deducted at source. |
These are published maximums from individual lenders' public pages, not a market average, and lenders change them without notice. A sanction can come in well below them.
Is there an RBI limit on LAP LTV?
No, not for a business LAP, as of November 2026. Online answers often mix up the housing loan caps with LAP, so here is what the rules say.
- Housing loans have RBI LTV caps. RBI's Commercial Banks Credit Facilities Directions, 2025 (para 111) and Housing Finance Companies Directions, 2025, updated as on 1 October 2026 (para 58) cap individual housing loans at 90% up to ₹30 lakh, 80% from ₹30 lakh to ₹75 lakh and 75% above ₹75 lakh.
- A LAP is not a housing loan. The HFC Directions say loans given against mortgage of property for any purpose other than buying, building or renovating a dwelling unit are non-housing loans. So the housing LTV table does not apply to a LAP.
- The other RBI LTV caps are for other collateral. RBI's NBFC Credit Facilities Directions, 2025 (updated as on 15 July 2026) set maximum LTVs for consumption loans against gold and silver (para 43) and, for NBFCs with assets of ₹100 crore or more, a 50% LTV for loans against listed shares (para 106). Neither covers property.
- What RBI does require is a valuation policy. HFCs must have a board-approved policy for realistic valuation of properties and empanelment of valuers (HFC Directions, para 215). LTV, tenure and age limits for a LAP sit in each lender's own credit policy.
So when a lender quotes "up to 65%", that is its own policy limit, and two lenders can treat the same property differently.
How lenders size a LAP: three tests
A lender runs three tests and sanctions the smallest result.
- The value test. Lender's valuation multiplied by its LTV for that property type. The valuation is the lender's, not your purchase price or a broker's estimate.
- The cash-flow test. The EMI your business can carry after existing EMIs, converted into a loan amount at the offered rate and tenure. Banks often frame this as a ratio of EMIs to income for individuals, or as a debt service coverage ratio for firms. See DSCR explained.
- The tenure test. The lender's maximum tenure, cut back so the loan ends before its age-at-maturity limit. A shorter tenure means a higher EMI, which shrinks the cash-flow test.
The rate feeds the second test. As of 1 November 2026, RBI's repo rate is 5.50%, after the Monetary Policy Committee raised it by 25 basis points on 7 October 2026, so repo-linked LAP rates move up at their next reset date. See what the October 2026 repo hike means for business loans.
Self-occupied or rented: why it changes the loan
Self-occupied property is repaid from your business income, so the cash-flow test does the work. Homes get the higher LTV band on the pages we checked.
Rented property gives you two routes:
- A LAP that counts the rent as income. The rent adds to your repayment capacity. One public sector bank page says that for let commercial property it also takes an assignment of the rent and a tripartite agreement with the tenant.
- An LRD. The loan is sized on the rent itself. On the public pages we checked, the amount is the lower of a share of the present value of future net rent and a share of the property's value, and the tenure runs no longer than the remaining lease or lock-in, up to 10 years.
RBI's rules also treat the two routes differently. Under the Commercial Banks Credit Facilities Directions (para 130), a loan repaid from rent on existing commercial property is generally a CRE exposure. It can be treated as non-CRE if the lease lock-in is at least as long as the loan and the lease does not allow the rent to be cut during the loan. NBFC rules (para 110 of their Credit Facilities Directions) also treat loans repaid from lease or rental payments as CRE. So a long lock-in with a strong tenant is worth more to a lender than the same rent on a short lease.
LAP or LRD: which one?
| LAP | LRD | |
|---|---|---|
| Sized on | Property value and your business cash flows | Future rent from the tenant, capped by property value |
| Who repays | Your business | The rent, usually routed to the lender |
| Typical tenure on public pages | Up to 15 years | Up to 10 years or the remaining lease |
| Suits | The property is self-occupied, or rent is small next to business income | A let commercial property with a long lock-in and a strong tenant |
| Main risk | Business cash flow falls | The tenant leaves or the rent is cut |
Worked example: one owner, two properties
Illustrative example, assuming a 52-year-old proprietor who needs ₹1.5 crore; owns a self-occupied house valued by the lender at ₹2.4 crore and a shop valued at ₹1.5 crore let to a company at ₹1 lakh a month net, with 72 months of lock-in left; can carry ₹1.8 lakh a month of new EMI; and is offered a floating rate of 10.5% for every option, an LTV of 65% on the house and 55% on the shop, a 15-year maximum tenure and repayment by age 70. These are assumptions, not loan terms.
| Test | Calculation | Result |
|---|---|---|
| Value test, house | 65% of ₹2.4 crore | ₹1.56 crore |
| Value test, shop as a LAP | 55% of ₹1.5 crore | ₹82.5 lakh |
| Tenure test | 18 years to age 70, capped at 15 years | 15 years |
| Cash-flow test | ₹1.8 lakh EMI for 15 years at 10.5% | about ₹1.63 crore |
| Eligible on the house alone | Smaller of ₹1.56 crore and ₹1.63 crore | ₹1.56 crore, so the ₹1.5 crore need is met |
| EMI on ₹1.5 crore | 15 years at 10.5% | ₹1,65,810 a month |
Now change one input. If the same owner were 60, the age limit would allow only 10 years. The same ₹1.8 lakh EMI would then support about ₹1.33 crore, and the EMI on ₹1.5 crore would be ₹2,02,402. The file would fall ₹16.6 lakh short, with the property value unchanged. For older owners, a younger co-owner as co-applicant, a part-prepayment plan or a second property often matters more than a higher LTV.
The shop as an LRD:
| Step | Calculation | Result |
|---|---|---|
| Present value of rent | ₹1 lakh a month for 72 months, discounted at 10.5% | ₹53.25 lakh |
| LRD at an assumed 80% of that value | 80% of ₹53.25 lakh | ₹42.6 lakh |
| Value cap at an assumed 50% | 50% of ₹1.5 crore | ₹75 lakh |
| LRD sanction, the lower figure | ₹42.6 lakh over 72 months | |
| EMI | ₹42.6 lakh, 72 months at 10.5% | ₹80,000, which is 80% of the rent |
| Balance from a house LAP | ₹1.5 crore less ₹42.6 lakh | ₹1.074 crore, EMI ₹1,18,719 over 15 years, 44.7% LTV |
The split route uses the tenant's rent to repay part of the need over six years and leaves the house at a lower LTV. It also needs two sanctions and two sets of charges, so compare the total cost in each lender's Key Facts Statement.
A longer tenure lowers the EMI but raises the total interest. On ₹1.5 crore at 10.5%, total interest is about ₹92.88 lakh over 10 years and about ₹1.48 crore over 15 years. If your loan qualifies under RBI's prepayment rules, you can take the longer tenure and prepay when cash allows. See our LAP balance transfer and prepayment guide.
Why LAP limits come in lower than expected
- The lender's valuation is lower than your estimate. LTV applies to the valuer's figure.
- Title, plan or occupancy gaps. Unapproved construction can cut the value the lender accepts, or rule the property out.
- Age. Tenure is cut so the loan ends by the lender's age limit, and the EMI rises.
- Existing EMIs. Every current EMI reduces the cash-flow test.
- Property type. Commercial property gets a lower LTV than a home on the lender pages we checked that publish both.
- Short lease lock-in. Lenders size an LRD on the rent due over the certain period of the lease, so a short lock-in shrinks the loan.
A checklist before you apply
- Get an independent valuation view and assume the lender's figure may be lower.
- Work out your age at maturity for 10, 15 and 20 years and see which tenures are possible.
- Calculate the EMI you can carry after existing EMIs, then convert it into a loan amount at today's rate.
- List each property with its type, use, title papers, approvals and any existing charge.
- For let property, collect the registered lease, the lock-in period, rent receipts and the tenant's details, and ask for both LAP and LRD quotes.
- Compare offers on the KFS using the annual percentage rate (APR), not the headline rate. See the business loan documents list.
How MoneyKarma helps
MoneyKarma is a loan distribution platform for Indian businesses and real estate developers, with 90+ lenders. Not a lender. Our lending partners include public sector banks, private banks, NBFCs and financial institutions, and their LTV, tenure and age limits differ. We help you run the value, cash-flow and tenure tests on your own properties, compare LAP and LRD routes, and share your file with the lending partners you choose. Our team responds within 24 hours on average. Every credit decision, LTV and tenure is set by the lender. See loan against property, or share your requirement.
This guide is general information, not financial, legal or tax advice. Figures from lender pages are published maximums as of 1 November 2026 and change without notice. Confirm terms in each lender's sanction letter and Key Facts Statement.