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 First Home Loan Deposit Scheme Guarantee will be required. It’s best to talk to a home loan consultant to find out more.