What Is LVR – And Why Should You Care?
LVR stands for Loan-to-Value Ratio
It’s one of the first things banks check when you apply for a home loan
How to Calculate LVR
LVR = (Loan Amount ÷ Property Value) x 100
Example:
You borrow $800,000 to buy a $1,000,000 property
→ LVR = 80%
Why Does LVR Matter?
Because the higher your LVR, the riskier you look to the bank
And when banks see risk, they charge you for it
What Happens If LVR Is Over 80%?
You’ll likely be charged Lenders Mortgage Insurance (LMI)
Not for your protection, it protects the bank in case you can’t repay
LMI can cost $10,000–$30,000+, depending on your loan size and LVR
The Sweet Spot: 80% or Lower
Keep your LVR at or under 80% to:
- Avoid paying LMI
- Get better interest rates
- Improve your chances of approval
- Quick Tips to Lower Your LVR
Save a bigger deposit
Buy a lower-priced property
Get help from a guarantor (e.g. parents)
Consider First Home Buyer grants if eligible
Not sure where your LVR stands?
We can calculate it for you in 2 minutes – no obligations
Call/WhatsApp: +84 96 275 92 07
Email: support@sw-globalfinance.com.au