What is LVR?
LVR (Loan-to-Value Ratio) is the percentage of a property's value that you borrow. A higher LVR means more risk and possibly LMI.
LVR stands for Loan-to-Value Ratio. It's your loan amount divided by the property value, expressed as a percentage. If you buy a $500,000 home with a $400,000 loan, your LVR is 80%.
Lenders use LVR to assess risk. Borrow more than 80% and you'll usually need to pay Lenders Mortgage Insurance (LMI). Lower LVR means better interest rates and fewer restrictions.
Key facts
- •Calculated as (loan amount / property value) x 100
- •LVR above 80% usually triggers Lenders Mortgage Insurance (LMI)
- •Lower LVR generally means better interest rates
- •First Home Guarantee allows up to 95% LVR without LMI for eligible buyers
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Mortgage CalculatorFrequently asked questions
What is a good LVR?
80% or lower is ideal because you avoid LMI. Some lenders offer sharper rates at 70% or 60% LVR. The lower your LVR, the less risk the lender takes on.
Can I get a loan with a high LVR?
Yes, some lenders go up to 95% LVR, but you'll pay LMI (which can be thousands of dollars) and likely cop a higher interest rate. Government schemes can help first home buyers avoid LMI at high LVR.
General information and estimates only — not financial, tax, or legal advice. Always verify with a licensed adviser or the ATO.