Loan to Value Ratio (LVR)
The Loan to Value Ratio (LVR) is a measurement of the amount you need to borrow (loan) as a proportion of the ‘lender-assessed value’ (the lender’s estimate for the property’s value).
A property is valued by the lender at $1,000,000 and you have a $200,000 deposit. That means you need to borrow $800,000 to cover the rest of the purchase. Hence, your LVR = 800,0001,000,000 = 80%*
*This is a very simplified example which excludes possible fees and costs.
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