Loan to Value Ratio (LVR)

The Loan to Value Ratio (LVR) is a ratio to calculate the percentage that the loan amount represents, against the value of any security that is being offered by a borrower.


Here is an example of the equation:

Loan Amount/Valuation x100=LVR

The final purchase price of a property and the valuation of a property, may not necessarily be the same figure.

If this is the case, the lender will use the lower of the two figures.

Many lenders will go to a maximum of 95% for owner occupied properties and 90% for investment properties. However, this depends on the lender’s products and criteria, which can often change.

Lenders prefer deposits to come from genuine savings.

When LVR is calculated, the ratio is calculated on the total amount of the loan, which generally includes all fees and charges, against the value of the property.

In the case of multiple securities, LVR is calculated on the total value of all of the properties.

In those instances, the calculation is:

Total Loans on Property/Total Valuation of Property x 100=LVR%


Need a property or vehicle loan?

Contact us @ propertyloans@realrenta.com


Marlene Liontis & Jason Gwerder
Thursday, 27 February 2020

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