Mortgage Guide

What is LVR?

Loan-to-Value Ratio is one of the most important numbers in your mortgage application.

LVR Formula

LVR = (Loan Amount ÷ Property Value) × 100

For example: if your property is valued at $800,000 and you borrow $640,000, your LVR is 80%.

Why LVR Matters

LVR ≤ 80%Standard

Most lenders offer standard products with no LMI requirement. Best rates are typically available at 80% or below.

LVR 80–90%Caution

Lenders Mortgage Insurance (LMI) is typically required. You have fewer product options and may pay a slightly higher rate.

LVR > 90%High Risk

LMI is almost always required. Many lenders restrict lending above 90–95% LVR. Higher rates and stricter lending criteria apply.

What is Lenders Mortgage Insurance (LMI)?

LMI is insurance that protects the lender (not you) if you default on your loan. It is required when your LVR exceeds the lender's threshold — commonly 80%. The cost is typically added to your loan amount.

LMI cost example

On an $800,000 property with a 10% deposit ($80,000), LMI could cost $15,000–$25,000 depending on the lender and insurer. This is added to your loan, increasing both your balance and total interest.

How to Reduce Your LVR

1.Save a larger deposit. A 20% deposit achieves 80% LVR, avoiding LMI entirely.
2.Use a guarantor. In some markets, a parent or family member can guarantee part of the loan, reducing the effective LVR.
3.Make extra repayments. Over time, your LVR falls as your principal decreases and (in rising markets) property value increases.
4.Consider a first home buyer scheme. Some governments allow first home buyers to purchase with lower deposits without paying LMI.

See your LVR instantly

Enter your property price and deposit — LVR calculates automatically with colour-coded warnings.

Calculate Your LVR