Requirements for LTV, DTI and DSTI limits

The European Systemic Risk Board (ESRB) has included LTV (loan-to-value), LTI (loan-to-income), DTI (debt-to-income) and DSTI (debt service-to-income) requirements among the macroprudential instruments1 that national authorities can use to support financial stability on top of the instruments contained in CRD IV. The aim of these instruments is to limit excessive risks related to the property market.

The CNB regularly assesses mortgage loans and the overall situation on the mortgage market and the residential property market. Based on macroprudential analyses and the information it gathers in the course of financial market supervision, the CNB issues a Recommendation on the management of risks associated with the provision of retail loans secured by residential property (hereinafter the “Recommendation”). The Recommendation contains a summary of recommended limits for selected credit ratios and a set of other rules, the observance of which constitutes prudent behaviour when conditions on the financial market are taken into account.

The recommended limits relate to the following credit ratios:

  • loan-to-value (LTV)
  • debt-to-income (DTI)
  • debt service-to-income (DSTI)

The Recommendation also covers additional conditions for the provision of mortgage loans. These include the maximum maturity of a mortgage loan with additional consumer credit, acceptable methods of principal repayment, increasing the principal of an existing mortgage loan, etc.

Currently applicable recommended credit ratio limits

Brief overview of main changes in Recommendations issued

Recommendation on the management of risks associated with the provision of retail loans secured by residential property


1 Recommendation of the ESRB on intermediate objectives and instruments of macro-prudential policy (ESRB/2013/1).