What is LVR?
Loan to Value Ratio (LVR) is the percentage of a property’s value that is financed by a loan. It is commonly used by lenders to assess risk when approving a home loan.
How is LVR Calculated?
LVR is calculated by dividing the loan amount by the property value and multiplying by 100. For example, a $400,000 loan on a $500,000 property results in an LVR of 80%.
Why is LVR important?
LVR is important because it can affect your loan approval, interest rates, and whether you need to pay lenders mortgage insurance (LMI). Lower LVRs are generally seen as lower risk by lenders.
LVR Calculator
Calculate your loan to value ratio (LVR) based on your loan amount and property value.
What is good LVR?
An LVR of 80% or lower is generally considered favourable, as it may allow borrowers to avoid LMI. Higher LVRs may still be approved but often come with additional costs.
Frequently Asked Questions
What is LVR?
LVR stands for Loan-to-Value Ratio. It measures the size of a loan compared to the value of the property being purchased. LVR is commonly used by lenders to assess lending risk.
What is Lenders Mortgage Insurance (LMI)?
Lenders Mortgage Insurance is an insurance premium that may apply when borrowing with a higher LVR, typically above 80%. LMI protects the lender, not the borrower.
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