How to Calculate LVR: A Beginner’s Guide

Learn the basics of LVR calculation and its importance in lending

Calculating the loan-to-value ratio, or LVR, is an important step in the lending process. As a beginner, it can seem daunting, but with a little bit of understanding and knowledge, it’s easy to understand.

LVR is a percentage that compares the amount of money you are borrowing to the value of the property you are purchasing. For example, if you are buying a property for $500,000 and you are borrowing $475,000, your LVR would be 95%. It is important to know your LVR because it can affect the interest rate and fees that you are charged on your loan.

Mortgage Street, a leading Australian lender, offers a range of products to suit different needs, including the Super Prime I product, which offers a maximum LVR limit of 95%. This means that customers can borrow up to 95% of the value of the property they are purchasing. This is an excellent option for customers who are looking to enter the property market but may not have a large deposit saved.

It is important to note that the higher the LVR, the higher the risk for the lender. This means that customers with a higher LVR may be charged higher interest rates and fees. However, by understanding your LVR and working with a mortgage broker, you can find the best loan options to suit your needs.

In conclusion, learning the basics of LVR calculation is an important step in the lending process. It is crucial to understand your LVR and how it can affect the interest rate and fees of your loan. Mortgage Street’s Super Prime I product offers a maximum LVR limit of 95%, making it an excellent option for customers looking to enter the property market. If you are looking to purchase a property and need help understanding your LVR and finding the best loan options, reach out to a Mortgage Street accredited mortgage broker today.