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The term LVR is an acronym for “Loan to Value Ratio” and is a calculation used in a lot of different forms of lending. It represents the value of your lending as a percentage of the assets value.
When it comes to home loans, the results of this calculations help lenders work out how risky they think that the loan to give you is going to be.
Every lender has different policies depending on the value of your LVR. For the most part, the LVR can determine where you can borrow and how much you can borrow in some cases.
It will affect the interest rate of your home loan as well. Most lenders have their best rates reserved for those with an LVR of 80% or less. Well is no exception here and our best rates are for the lower risk LVR bands (ie Less than 80%).
With a lower risk also comes the savings from not having to pay Lenders Mortgage Insurance. For loans that have an LVR over 80%, you will most likely have to pay for LMI. You can read up more about LMI here.
It’s actually very straighforward to work out the LVR of your home loan. It is simply the amount borrowed divided by the value of the property being used as security for the loan and then it’s expressed as a percentage (we always multiply by 100).
Let’s look at a quick example below and then we’ll explain the difference in the calculations for purchasing and refinancing.
If we wanted to borrow say $450,000 and the value of the property that we are using is worth $500,000 then our LVR is:
$450,000 ÷ $500,000 = .9 (and then we multiply by 100 to get a %). So our LVR is 90%.
If you’ve been happy with the results that you’ve seen here and think that a Well Home Loan could be right for you, then just hit up the pre-qualification below and get started!
Most other lenders have fairly rigid eligibility criteria and if you don’t fit the checkboxes, then you don’t fit the loan.
Getting pre-qualified with Well means there are no upfront credit reports and you can walk away with answers that you need.
Flexstar Mortgage Corporation Pty Ltd
trading as Well Money®
ABN: 30 154 777 152
Australian Credit Licence 430334
The comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Lending criteria, fees and conditions apply. Rates, fees and conditions are indicative, available for new loans only and subject to change without notice.
NOTE: The comparison rate shown in this example assumes a maximum LVR of 80% and no offset option. If your LVR is higher than 80% and/or you take an offset option, your comparison rate will be different. Refer to the Key Fact Sheet for a more personalised scenario.
Interest rates current as at the following date: 25th July 2022. Interest rates are subject to change at any time without notice. The actual interest rate on your home loan will be quoted at the time of settlement along with the actual repayment amounts.
Interest Rates may change between the time of your application and settlement of your loan due to market conditions.
Interest rates for existing customers may not be the same as interest rates for new customers. If you have paid a Rate Lock Fee, the rate provided will be listed on your letter of offer and will take effect upon acceptance and payment of the rate lock fee. Rate lock is not available for all fixed rates products.
Well Money® is the trading name of Flexstar Mortgage Corporation Pty Ltd | ABN: 30 154 777 152 | Australian Credit Licence 430334