What Is LVR (Loan-to-Value Ratio)?
Australian shorthand for Loan-to-Value Ratio: the proportion of a property's value you are borrowing. LMI is typically required above 80% LVR.
Definition
LVR is the standard Australian term for what other markets call LTV (Loan-to-Value ratio). It is expressed as the loan divided by the property value, as a percentage. Australian lenders use LVR tiers to price home loan rates and determine LMI requirements. A 20% deposit gives an LVR of 80%, which is the standard threshold below which Lenders Mortgage Insurance is not required. Government-backed schemes such as the First Home Guarantee allow eligible first home buyers to access 95% LVR without LMI. Investment property loans generally have lower maximum LVRs (typically 80-90%) than owner-occupier loans.
Formula
Example
Borrowing $480,000 against a $600,000 property: LVR = 480,000 / 600,000 x 100 = 80%.