Loan to Value Ratio is a risk assessment ratio that banks and other lenders examine before approving a mortgage.

The LVR is a way of working out the true financial value of a property and influences whether your loan needs to be covered either by insurance or a low deposit premium.

The LVR is the simply the amount of the loan, divided by the value of the property.

Generally, if you borrow more than 80% of a property’s value, you will need to get private mortgage insurance to protect the lender.

An LVR of 60% or below is referred to as a “No/Low Doc Loan”, which generally means that borrowers do not have to provide income statements to the bank/financial institution.

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