If you borrow 50-70 per cent of your home’s value, the loan must be repaid by one per cent of the total loan amount per year. If you borrow above 70 per cent of the value, you must repay two per cent of the total loan amount per year. In addition to this, if you are borrowing more than 4.5 times your annual gross income, you must repay a further one per cent of the total loan amount. If the loan is under two people’s names, we count their combined salaries. Even if you are not subject to the amortisation requirement, it is always a good idea to amortise your loans.
The loan-to-value ratio represents the size of the mortgage loan in relation to the property’s market value.