Skip to main content

What is LVR? LVR is the Loan to Value Ratio calculation. This is used by lenders, mortgage brokers and the lender’s mortgage insurance providers to determine the equity in a property.

The Loan to Value Ratio (LVR) is calculated by taking a loan amount, dividing it by the value of a property and multiplying it by 100. For example:

Mr and Mrs Smith own a property that is valued at $500,000. They have a loan secured by the property of $280,000. To calculate the LVR we would divide the loan amount by the property value and then multiply it by 100: $280,000 / $500,000 * 100 = 56% LVR.

Higher LVR loans are deemed higher risk as there is less equity available, which is concerning in a declining property market.

*All information is current as at July 2020