What is loan–to–value ratio (LVR)?

What is loan–to–value ratio (LVR)?

The loan-to-value ratio (LVR) in relation to home loans is the amount of the loan expressed as a percentage of the value of the property being purchased or refinanced.

Each Defence Bank home loan product has a maximum LVR.

The LVR is expressed as a percentage. It is determined by dividing the amount of the loan by the property value with the answer then multiplied by 100%.

As a formula, LVR is expressed as follows:

Where the LVR exceeds 80% lenders mortgage insurance (LMI) or, if you are eligible, a guarantee under the Home Guarantee Scheme will be required. It’s best to talk to a lender to find out more.