Your LVR is the single number that decides whether you pay Lenders Mortgage Insurance and which interest-rate tier you land in. Enter the price and your deposit to see where you sit.
What LVR means
LVR is your loan divided by the property's value, as a percentage. Borrow $640,000 to buy an $800,000 home and your LVR is 80%. Lenders care about it more than almost any other number because it measures their risk: the higher the LVR, the less of your own money is on the line, and the more they stand to lose if the loan goes bad and prices fall.
Why 80% is the line that matters
At 80% LVR or below you dodge Lenders Mortgage Insurance (LMI) — a one-off premium that can run into five figures — and you qualify for most lenders' standard pricing. Push above 80% and LMI kicks in; the premium climbs steeply as LVR rises toward 95%. That single threshold is why "save a 20% deposit" is the classic advice.
The bands lenders price on
| LVR | What it means |
|---|
| ≤ 60% | Lowest risk — some lenders shave an extra 0.1–0.2% off the rate |
| ≤ 80% | No LMI, standard sharpest pricing |
| 80–90% | LMI payable; rate often slightly higher |
| 90–95% | LMI expensive; fewer lenders, tighter policy |
| > 95% | Rare without a guarantor or a government guarantee scheme |
How to lower your LVR
Add to the deposit, buy a less expensive property, or use a guarantor (a family member's equity counts toward your security, dropping the effective LVR). First home buyers can also sidestep LMI at up to 95% LVR through the federal Home Guarantee Scheme, where the government — not an insurer — covers the gap above 80%.
Lenders use the lower of the purchase price and their own valuation. If the bank values the place below what you paid, your LVR rises — and a loan that looked like 80% can tip into LMI territory.
Frequently asked questions
How do I calculate LVR?
Divide your loan by the property value and multiply by 100. A $640,000 loan on an $800,000 home is an 80% LVR. This calculator does it from the price and your deposit.
What is a good LVR?
80% or below is the sweet spot — you avoid Lenders Mortgage Insurance and reach most lenders' sharpest rates. Dropping below 60% can earn a small extra rate discount.
What LVR do I need to avoid LMI?
80% or lower with most lenders, which means a deposit of at least 20% of the property value. First home buyers can sometimes avoid LMI up to 95% LVR through the Home Guarantee Scheme.
Does a lower LVR get a better interest rate?
Often yes. Many lenders publish tiered pricing, reserving their best rates for borrowers at or below 60–70% LVR, so a bigger deposit can cut both LMI and your ongoing rate.
Can I get a home loan at 95% LVR?
Yes — many lenders lend up to 95% LVR (a 5% deposit), but you'll pay LMI on the high-LVR portion and face stricter approval. Above 95% you generally need a guarantor or a government scheme.