What is a loan to value ratio?
LVR' is an abbreviation for the term Loan to Value ratio. It is the percentage of the loan amount compared to the value of that property. So if a house is worth $160,000, and the mortgage is $80,000, then the LVR is 50%.
When you're taking out a home loan the lender will set their rates and sometimes vary their discounts according to your LVR, as they see it as a good sign of how risky a customer you are. Most lenders also require a borrower to take out Lender's Mortgage Insurance (LMI) if the LVR is 80% or more.
Your ability to get a loan with a particular LVR depends on many different variables including your income, level of savings, credit history, risk profile. The best way to find out how much you are able to borrow is talk to an expert Aussie Broker who will be able to assess your current financial situation and look at your options.
This free service is part of your free appointment with an expert Aussie broker.