What is Loan to Value Ratio



What is a loan to value ratio?

Like most first home buyers, you’ve probably still got a stack of questions that need answers. That’s okay, because our home loan experts have put together the answers to the most frequently asked questions and provided some handy tools and links to help you further.

Our lending specialists will help you to find the best option to suit your needs.

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What is Loan to Value Ratio?

LVR means Loan to Value Ratio. This is a very common acronym you've probably heard mentioned in relation to home loans. The LVR is basically the amount you borrow in comparison to the value of the investment - in the case of home loans, the investment is the property you intend to purchase.

If you are purchasing a property for $500,000, and you put down a 20 per cent deposit ($100,000), you'll only need to borrow $400,000. This means your LVR is 80 per cent. Loan to Value Ratio is calculated by home loan amount divided by property value, so $400,000 ÷ $500,000 = 0.8 (or 80 per cent).

Lenders will always assess your LVR in determining whether to approve your home loan. A higher LVR means you are a greater lending risk, however, keep in mind this is not the only factor determining risk, nor is it the only factor for approval.

A higher LVR typically means your regular repayments will be greater, and the interest rate might not be as favourable as that of a loan with a lower LVR.


Tools and calculators.

  • Choose your repayment options. Calculate repayments based on weekly, fortnightly and monthly amounts.
  • Keep your calculations safe. Print, email and save your loan repayment data for future reference.
  • Learn about your options. Determine a realistic borrowing amount that suits you and your life.

How much can I borrow?


Terms, conditions, fees, charges and normal lending criteria apply. Full details are available in our loan offer or on request. All-In-One Accounts and Interest Only repayments are not available with a Parent Equity Home Loan.

1. The guarantee and additional security must be provided by your parent(s), in law or step-parent(s).

2. Lender’s Mortgage Insurance is not required where the loan value is less than or equal to 80% of the total value of the property, plus the additional security provided by the guarantor.

3. Provided the borrower(s) are not in default and the LVR on the outstanding loan balance is below 80%.

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