What is LVR in an Australian home loan?

Question: What is LVR in an Australian home loan?

Answer: LVR stands for Loan to Value Ratio. It is the percentage of the property value that you are borrowing. For example, if a property is worth 600,000 dollars and the loan is 480,000 dollars, the LVR is 80 percent.

Lenders use LVR as one way to measure risk. A lower LVR usually means the borrower has more deposit or equity in the property. A higher LVR may still be possible, but it can affect lender choice, interest rate options, approval conditions and whether Lenders Mortgage Insurance applies.

The 80 percent mark matters because loans above 80 percent LVR often involve LMI unless an exemption, waiver or government scheme applies. LVR can also change if the lender valuation is different from the purchase price, which is why the valuation step can matter.

A broker can help calculate the LVR, estimate deposit and cost requirements, and compare how different lenders may treat the same scenario. This is general information only and lender policy can change. For guidance tailored to your situation, speak with TwoFold Lending on 1300 100 019 or book an appointment.

Important: This answer is general information only and does not consider your objectives, financial situation or needs.