Key takeaways
- LVR is the loan amount as a percentage of the property’s value — loan ÷ value × 100.
- At 80% or below you avoid LMI and get the best rates; above it, LMI usually applies.
- Lenders use the lower of the purchase price or their valuation, which can differ.
- Nudging just under 80% can remove LMI entirely — a small deposit near that line pays off.
If there’s one number that quietly runs a home loan, it’s LVR. It sets whether you pay LMI, how sharp your rate is, and which lenders will even look at you. The good news: it’s simple to understand, and a small move near the key threshold can save you thousands.
How to calculate it
LVR is your loan divided by the property’s value, as a percentage. Borrow $480,000 against a $600,000 home and your LVR is 80%. Borrow $570,000 against the same home and it’s 95%. The higher the LVR, the more the lender is risking, and the more it charges you to cover that risk.
Why 80% is the magic line
At 80% LVR or below, lenders consider the loan low-risk: no Lenders Mortgage Insurance and access to their best advertised rates. Cross above 80% and LMI usually kicks in, and pricing can step up in tiers (85%, 90%, 95%). This is why the gap between a 19% and a 21% deposit is far bigger than it looks — it can be the difference of a five-figure LMI bill.
Lenders assess LVR against the lower of the purchase price or their own valuation. If a bank values the property below what you agreed to pay, your effective LVR rises — which can trigger LMI or a shortfall you didn’t plan for. A broker orders the right valuation early so there are no surprises.
How to lower yours
- Bigger deposit. The most direct lever — see our deposit guide.
- Guarantor. A family guarantee can push you under 80% without more cash.
- First Home Guarantee. Buy at up to 95% LVR with no LMI if you’re eligible.
- Growth. If you already own, rising value lowers your LVR — useful when refinancing or releasing equity.
Broker Insight. A valuation coming in just under a round number is one of the most common ways buyers get tipped into LMI. We often order valuations across several lenders to find the one that values a property most fairly.
Know your LVR before you make an offer
We’ll calculate your real LVR across lenders, flag any valuation risk, and show you the cheapest path under 80%. Free, no obligation.
Book your free game plan callFrequently asked questions
What is a good LVR?
80% or below is the sweet spot — at that level you avoid Lenders Mortgage Insurance and access lenders’ sharpest rates. Between 80% and 95% you can still borrow, but LMI usually applies and pricing can be higher. Above 95% your options narrow sharply. Lower is almost always better, but the right target balances your deposit against getting into the market at the right time.
How do I calculate my LVR?
Divide the loan amount by the property’s value and multiply by 100. On a $600,000 property with a $480,000 loan, that’s 480,000 ÷ 600,000 = 80% LVR. Lenders use the lower of the purchase price or their own valuation, which can differ from what you paid — a gap that occasionally surprises buyers.
How can I lower my LVR?
Save a larger deposit, buy a less expensive property, use a guarantor, or wait for the property to grow in value if you already own it. Even nudging just under 80% can remove LMI entirely, so a small extra deposit near that line often pays for itself many times over.
This guide is general information only and does not take your personal circumstances into account. It is not financial or credit advice. Government schemes, lender policies, rates and tax rules change over time and eligibility criteria apply. Speak with us for advice tailored to your situation.