Loan-to-Value Ratio (LVR)

How does a Loan-to-Value Ratio (LVR) calculator help you?

For help working out what your Loan-to-Value Ratio (LVR) is, you can use our Loan-to-Value Ratio (LVR) calculator. All you need to enter is your property price and deposit amount.

The higher your Loan-to-Value Ratio (LVR), the harder it is to be approved for a loan and the more you’ll likely have to pay in interest.

So if the Loan-to-Value Ratio (LVR) calculator shows that you have a high Loan-to-Value Ratio (LVR), you should consider whether you need to save a larger deposit or look to buy a cheaper property.

How is Loan-to-Value Ratio (LVR) calculated?

The Loan-to-Value Ratio (LVR) is the percentage representation of the loan’s size to the value of your property. So, if you had a $100,000 deposit and you’re borrowing $400,000 to purchase a property that’s valued $500,000, your Loan-to-Value Ratio (LVR) would be 80%, since the loan size ($400,000) represents 80% of the property’s value ($500,000). Your deposit represents 20% of the property’s value, which is your equity in the property. The bigger your deposit on the property, the smaller your Loan-to-Value Ratio (LVR) will be.

So basically, your Loan-to-Value Ratio (LVR) % = ($loan size/$property value) x 100.

Lenders place a great deal of emphasis on Loan-to-Value Ratio (LVR), and in some cases are less likely to lend to people with a high one. Typically, those with an Loan-to-Value Ratio (LVR) of 80 or less (a deposit of 20% or more) won’t have to pay the thousands of dollars for Lenders Mortgage Insurance (LMI). A lower Loan-to-Value Ratio (LVR) can also suggest that you’re a trustworthy borrower with good savings habits.

How to use the calculator + details of information required

All you need to enter is your property price and deposit amount. The calculator will determine your Loan-to-Value Ratio (LVR).