What Is LVR (Loan-to-Value Ratio)?

To work out your LVR, divide the loan by the property value and multiply by 100.

LVR = loan amount ÷ property value × 100

Worked example: you buy a $750,000 home with a $75,000 deposit, so you borrow $675,000. $675,000 ÷ $750,000 × 100 = 90.0% LVR. Moneysmart's own example is a $450,000 loan on a $600,000 house, an LVR of 75%.

Run the formula backwards to find the largest loan at a given LVR: value × LVR. At 80% of $750,000 that is $600,000, so you need a $150,000 deposit, plus stamp duty and costs. The home deposit calculator shows the cash you need at each deposit level, and our LVR calculator works out your own LVR.

What does LVR mean? How regulators and lenders define it

Every official definition says the same thing: the loan divided by the value of the property that secures it. Where they differ is which value, and that is the part that moves your number.

Which property value do lenders use for LVR?

The lower of the price you pay and the lender's valuation. APRA's prudential standard APS 112 sets this for banks: when a loan finances a purchase, the value used for LVR cannot be higher than the purchase price, and the valuation cannot be higher than market value.

So a low valuation raises your LVR, but a high one does not lower it. On a $600,000 purchase with a $480,000 loan:

Our arithmetic, applying the APS 112 rule.

St.George gives its own example: buy at $510,000 with a bank valuation of $500,000, and it uses the $500,000 valuation to work out your LVR. It also says a bank valuation is typically more conservative than the market value. If the valuation comes in short, you either add to your deposit or accept a higher LVR, which can mean LMI.

Other APS 112 rules that change your LVR

• After you buy, the lender keeps the value from when the loan started. It changes only with a new valuation as part of a new loan application, a likely permanent fall in value, or work that unequivocally increases the value.
• If more than one property secures the loan, the lender adds their values together.
• The loan amount includes accrued interest, fees and any undrawn amount the lender has committed to.

Is LVR the same as LTV?

Yes. LVR and LTV (loan-to-value) are the same calculation under two labels.

Australian banks, APRA and Moneysmart say LVR; APRA spells it out as loan-to-valuation ratio. LTV is the usual label in the United States and the United Kingdom. The US Consumer Financial Protection Bureau says lenders use the LTV ratio to decide whether you need private mortgage insurance, the US counterpart of LMI.

Why does 80% LVR matter?

80% is the line above which lenders usually require lenders mortgage insurance. CommBank puts it plainly: LMI "is usually required if your Loan-to-Value Ratio (LVR) is above 80%". LMI is a one-off premium that protects the lender, not you; read what lenders mortgage insurance covers. At exactly 80% LMI usually does not apply, but CommBank says its standard 80% limit can be lower in some circumstances.

Above 80%, the premium rises with each LVR band. Lenders price in finer steps, but three points show the pattern: 85%, 90% and 95%. In the LMI figures lenders publish, the typical rate goes from 1.0% of the loan at 85% to 2.0% at 90% and 4.2% at 95%.

LMI itself has a ceiling: QBE's LMI Guide sets its maximum LVR at 95% before the premium is added. For costs by deposit and loan size, see how much LMI costs. LVR can also set your interest rate: St.George says rates for new loans are based on the initial LVR and do not change during the life of the loan as the LVR changes.

What is your LVR once LMI is added to the loan?

Higher than before, because the premium becomes part of the loan while the value stays the same.

APS 112 counts fees in the loan amount, and CommBank adds every LMI premium to the loan at settlement. On the $600,000 home with a 5% deposit, the loan is $570,000 (95.0%). Add the typical LMI of $24,000 and the loan becomes $594,000, an LVR of 99.0%. At the top of the range it reaches 100.0%.

That is why QBE allows an LVR of 95% before the premium is added and 100% after. The LVR calculator shows your LVR both ways.

How many new home loans have an LVR of 80% or more?

About 3 in 10, measured by value. In the June 2026 quarter, 29.7% of new home lending by Australian banks, building societies and credit unions had an LVR of 80% or more, down from 30.4% a year earlier (APRA, released 17 September 2026).

Of all outstanding home loans, 16.7% had an LVR of 80% or more, down from 17.6%. New owner-occupier loans split like this:

The share of new owner-occupier lending at 90% or more went from 8.5% in the June 2025 quarter to 10.5% in the June 2026 quarter, and the share at 95% or more from 2.8% in September 2025 to 4.3%. APRA does not give a reason for the change.

What these figures do not tell you

They are not a count of loans that paid LMI. APRA's 80% ≤ LVR < 90% band includes loans at exactly 80%, which usually attract no LMI, and the totals include 5% Deposit Scheme and waiver loans with no LMI. They are dollar values, not numbers of loans, and cover banks, building societies and credit unions.

How can you lower your LVR?

Borrow less, or raise the value that secures the loan.

1. Add to your deposit. Every extra dollar comes straight off the loan.
2. Buy at a lower price. A valuation under the price pushes your LVR up, so leave room for it.
3. Pay LMI upfront instead of adding it to the loan, if your lender allows it. CommBank adds every premium to the loan.
4. Add security. A guarantor home loan lets a relative's property secure part of your loan, and where more than one property secures a loan, APS 112 has lenders add the values together.
5. Use the Help to Buy scheme. The government's equity contribution brings your loan to 80% LVR or less. In the official example, the buyer's LVR is 68%.
6. After you buy, repay principal. A rise in the home's value counts only when the lender orders a new valuation, for example when you apply for a new loan.

The 5% Deposit Scheme does not lower your LVR: with a 5% deposit it is still 95% (98% for single parents with a 2% deposit). It removes the LMI instead. For every route, see how to avoid LMI.

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