Calculate your loan to value ratio and learn more about LVR’s and how they apply to a home loan. Working out your LVR can help you understand more about what interest rate you can get on your home loan.
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%.
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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 different and/or you take an offset option, your comparison rate will be different.
Interest rates current as at the following date: 7th January 2025. 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.
Fees and charges apply to all loan products. Loan setup fees are payable at settlement. Any discounts or special offers apply only to the fees shown on this page and will be outlined in the loan contract.
Any fees that are payable to third parties, such as Solicitor Documentation Fees are incurred by service providers external from your Lender, are variable in nature depending on the services provided and are passed directly to the applicants. These costs are usually noted as “not ascertainable” and quotes provided with “from” are a reasonable estimate of what we know the costs can start from. This amount does NOT include all costs that may be incurred by these third parties.
Other fees may apply, including a Loan Processing Fee charged by Lender and depends on the structure of your loan. While usually “not ascertainable”, the fee is from $150 which is a reasonable estimate of the fee and will be advised to you in your loan contracts.
^ Valuation fee – Up to $300 free (Well Money will pay up to $300 per loan, any excess valuation fees are payable by the borrower(s))
For loans with an LVR over 80%, LMI will be required. This premium is to be paid by the borrower and may be payable from loan proceeds.
All applications for credit are subject to our credit approval criteria. Any advice on this website does not take into account your objectives, financial situation or needs and you should consider whether the information on this site is appropriate for you. Before making any decision in relation to any of our products you should read the relevant terms and conditions available at the Terms and Conditions page and at our Eligibility page when you apply online.
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