LVR (Loan-to-Value Ratio)

Loan-to-Value Ratio is the loan amount divided by the property value (or purchase price), expressed as a percentage. Lenders use it as a key risk signal: an 80% LVR or below is considered standard, 80-90% triggers LMI, and above 90% usually means tighter scrutiny and a higher rate. As an investor, watching your portfolio LVR matters because lenders look at your overall position when assessing borrowing capacity - a low individual LVR on one property doesn't help much if your other properties are highly geared. Rising property values mechanically lower your LVR over time, which is why investors track equity growth to plan refinances and next-purchase deposits.