What is LVR?

What is LVR?

With regards to understanding home loans, the term LVR is often used. LVR stands for ‘Loan to Value Ratio’ and can be described as the amount of money you borrow for a home loan, compared to the value of the property, which is expressed as a percentage.

Lenders work out your LVR to determine risk.

For example, if a property is valued at $500,000, and you pay a deposit of $100,000, you’ll need to borrow $400,000 for your mortgage, resulting in an LVR of 80%.
Generally, the lower the LVR, then the higher the loans security, which means lower risk and the loan is more likely to be approved.

If you are finding some financial terms regarding home loans a bit tricky to understand, have a chat to the specialists at Pulp Finance.

Contact Pulp Finance on 1300 506 998 or admin@pulpfinance.com.au

What is LVR?

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