Full definition
LTV is the ratio of the mortgage amount to the market value of the property set by an appraiser. KNF Recommendation S has capped LTV at 80% since 2017, implying a minimum 20% down payment. Banks may lend up to 90% LTV if the missing 10% is covered by low-deposit insurance (UNWW). UNWW adds 1.5%–4% of the "missing" deposit as a one-off premium, usually rolled into the loan. Lower LTV yields a lower margin: LTV ≤ 60% typically attracts a margin 0.2–0.4 p.p. below LTV 80%. On a 400,000 PLN mortgage that saves 15,000–30,000 PLN over the term.
Formula
LTV = loan amount / appraised property value × 100%
Concrete numeric example
Apartment worth 500,000 PLN, down payment 100,000 PLN, loan 400,000 PLN. LTV = 400,000 / 500,000 = 80% — within KNF guidance, no UNWW. A 50,000 PLN deposit (LTV 90%) would trigger UNWW of ~1,500–2,000 PLN premium.