What is LVR in Australian home loans?

LVR (Loan-to-Value Ratio) is your loan amount expressed as a percentage of the property's purchase price. If you borrow $720,000 to buy an $800,000 property, your LVR is 90%. LVR is one of the most important numbers in a mortgage application — it determines whether you pay LMI, how much you can borrow, and what interest rate tier you qualify for. Lenders cap LVR based on property type and whether you'll live there.

How it affects your borrowing

Your LVR determines your LMI liability and your maximum loan. Below 80% — no LMI. Above 80% — LMI applies, at increasing cost the higher the LVR. Lenders impose hard maximums: 95% for owner-occupier houses, 90% for apartments, lower again for investors.

Worked example

LVR calculation — $850,000 house, NSW

Purchase price$850,000

Savings before stamp duty$130,000

NSW stamp duty (non-FHB, house)≈ $33,000

Available deposit after stamp duty$97,000

Loan required$753,000

LVR88.6%

LMI payable?Yes — LVR exceeds 80%

Key factors

Owner-occupier houses and townhouses: maximum 95% LVR at most lenders.
Owner-occupier apartments: maximum 90% LVR.
Investor houses and townhouses: maximum 90% LVR.
Investor apartments: maximum 80% LVR (no LMI applies since 80% is the hard cap).
Some lenders apply stricter limits for small apartments, high-density postcodes, or regional areas.

See how this affects your specific situation

Calculate your LVR and deposit ceiling

Frequently asked questions

How do I calculate my LVR?

LVR = (loan amount ÷ purchase price) × 100. Your loan is the purchase price minus your deposit — the cash left after stamp duty and upfront costs. GetReal's calculator works this out automatically as part of the deposit ceiling.

Does LMI affect my LVR?

When LMI is capitalised into the loan (added to the balance), it increases the loan — which increases the effective LVR. GetReal ensures the final LVR including capitalised LMI stays within the ceiling.

What is a good LVR?

Below 80% is the key threshold — no LMI applies. Below 70% often qualifies for better interest rate tiers. The lower your LVR, the stronger your equity position and the lower the lender's risk.

Can I reduce my LVR over time?

Yes — every repayment reduces your loan balance and improves your LVR. If your LVR improves below 80% through repayments or property value growth, you may be able to refinance without LMI on the new loan.

This page is part of GetReal's methodology documentation. Figures are updated when underlying data in our Supabase database changes. This is not financial advice.