Mortgage Glossary

What is LVR (Loan-to-Value Ratio)?

The size of your loan compared to the value of the property, shown as a percentage.

LVR is calculated by dividing your loan amount by the lender-assessed value of the property, then multiplying by 100. For example, a $600,000 loan on an $800,000 property has an LVR of 75%. Lenders use LVR to assess risk — a lower LVR (meaning a bigger deposit) generally gives you access to better interest rates and can help you avoid paying Lenders Mortgage Insurance.