What is loan-to-value ratio?
LVR is the size of your home loan expressed as a percentage of the property's appraised value — a $400,000 loan on a $500,000 home is 80% LVR.
Loan-to-value ratio (LVR) is the ratio between your home loan and the lender's accepted valuation of the property, written as a percentage. A $400,000 loan on a $500,000 home is 80% LVR; the same loan on a $400,000 home is 100% LVR.
Lenders price risk against LVR. Borrowers above 80% LVR usually pay Lenders Mortgage Insurance and may face a slightly higher interest rate; borrowers at or below 80% LVR get the sharpest pricing because the lender's downside in a fire sale is well covered by the deposit.
The deposit cash you contribute, plus any grants like the First Home Owner Grant, reduce the loan amount and therefore your LVR. Stamp duty, conveyancing and lender fees are NOT part of LVR — they're settlement-day costs paid on top of the deposit.
LVR · loan to value ratio · loan to value · lvr ratio
- Lenders Mortgage Insurance (LMI) — LMI is a one-off premium that protects the lender (not the borrower) when the LVR is above 80%; typical cost on a $500,0…
- Comparison rate — Comparison rate is a statutory percentage that folds standard upfront and ongoing fees into the headline rate on a $150,…
- Stamp duty (transfer duty) — Stamp duty is a state government tax on property transfers, typically 3-5.5% of the purchase price, paid in full at sett…
General information only — not personal financial advice. Verified against https://ratesniffers.com.au/glossary on 2026-06-01.