Home loans

What is LVR?

Last verified · Methodology

What it means

The loan-to-value ratio compares what you borrow with what the property is worth. A $600,000 loan on a $750,000 home is an LVR of 80%, which means a 20% deposit. The lower the LVR, the less risk the bank takes and the better the rate it will usually offer.

The Reserve Bank limits how much high-LVR lending each bank can do. Since 1 December 2025, no more than 25% of a bank's new owner-occupier lending can have an LVR above 80%, and no more than 10% of new investor lending can be above 70%. Loans for new builds, Kāinga Ora First Home Loans and some refinancing are exempt.

How it is worked out

LVR = loan amount / property value x 100

Example

On a $750,000 home, a $112,500 deposit leaves an LVR of 85%, which is high-LVR lending. A $150,000 deposit brings it to 80%.

Run the numbers

Open the Mortgage calculator

Related terms

Low-equity marginA low-equity margin is extra interest, or a one-off fee, that a bank charges when your deposit is under 20% and the loan is above 80% LVR.Fixed-rate home loanA fixed-rate home loan locks the interest rate for a set term, usually 6 months to 5 years. When it ends you refix or roll to the floating rate.Break feeA break fee is what a bank charges if you repay or change a fixed-rate home loan before the term ends and wholesale rates have fallen since you fixed.
LVR: common questions

LVR is the size of your home loan as a share of the property's value. Banks limit owner-occupier lending above 80% LVR, so most need a 20% deposit.

Sometimes. Banks can still lend above 80% LVR within their 25% allowance, and new builds and First Home Loans are exempt, but expect a low-equity margin or fee.

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