Central Bank loan to value (LTV) regulations do not apply to which of the following types of loans?

• A. (i) only.
• B. (ii) and (iii) only.
• C. (i) and (ii) only.
• D. (i), (ii) and (iii).

Answer: (C)

LTV rules set a limit on how large a loan can be relative to the value of a dwelling when the loan is a residential mortgage. Not every loan falls under these rules—the regulator grants exemptions for loans that aren’t residential mortgages or aren’t secured by a dwelling.

The correct choice indicates that two of the loan types listed are exempt from LTV regulations. That means those two are not treated as residential mortgage lending and so do not have to meet the LTV caps. The remaining loan type would be within the scope of the LTV rules, so it would be subject to the cap. In practice, exemptions often include loans secured on non-residential property or loans used for purposes that aren’t buying or financing a dwelling. So two of the categories described are outside the regulatory LTV reach, while the third category is governed by the LTV limits.