LVR Calculator

How to Use the LVR Calculator

Choose Buying or Refinancing. When buying, enter the purchase price and your deposit, plus the bank's valuation and any LMI premium you plan to add to the loan if you know them. When refinancing, enter the property's value, your current loan balance and any extra you want to borrow. The LVR calculator shows your loan-to-value ratio, whether LMI is likely, how far you are from the 80%, 90% and 95% thresholds, and how much equity you have.

How to Calculate LVR

Worked Example: Loan to Value Ratio Calculation

Buying. You're buying for $750,000 with a $120,000 deposit, so the loan is $630,000. Your LVR is 630,000 ÷ 750,000 × 100 = 84%, which puts you in the "LMI likely" band. An 80% LVR allows a loan of up to $600,000, so you'd need a $150,000 deposit — $30,000 more — to avoid LMI in most cases. If the bank valued the property at only $720,000, your LVR would rise to 87.5% and you'd need a $174,000 deposit to get to 80%.

Refinancing. Your home is valued at $900,000 and you owe $480,000. Your LVR is 53.33% — in the lowest-risk band — and your total equity is $420,000. At 80% LVR you could borrow up to $720,000, giving $240,000 of usable equity. Borrowing an extra $100,000 to renovate would take the loan to $580,000 and the LVR to 64.44%, leaving $140,000 of usable equity.

What Your LVR Means

• 60% or less: excellent — some lenders reserve their lowest rates for low-LVR loans.
• Up to 80%: LMI usually isn't required.
• 80–90%: LMI is likely, and the premium rises as the LVR increases.
• 90–95%: high-LVR lending — LMI applies and lenders apply stricter criteria, such as genuine savings.
• Above 95%: beyond most lenders' limits without a guarantor or a government scheme.

Using Equity to Invest or Renovate

As you repay your loan and your property's value grows, your LVR falls and your equity builds. Refinancing lets you borrow against that equity — for a renovation, an investment property deposit or to consolidate higher-interest debts. Keeping the new loan at or below 80% LVR usually avoids LMI, but the lender will still assess whether your income supports the bigger loan. Rolling short-term debts into a 30-year mortgage can also mean paying more interest overall unless you repay them faster.

Frequently Asked Questions

How do you calculate LVR?

Divide the loan amount by the property's value and multiply by 100. A $630,000 loan on a $750,000 purchase is 630,000 ÷ 750,000 × 100 = an LVR of 84%. For a purchase, the value used is the lower of the price and the lender's valuation.

How do I work out my LVR as a percentage from my deposit?

Subtract your deposit from the purchase price to get the loan, then divide the loan by the price and multiply by 100. A quicker way: your LVR is 100% minus your deposit percentage, so a 16% deposit means an 84% LVR. That shortcut only holds when the valuation isn't lower than the price and you're not adding LMI to the loan.

How do I calculate LVR for a refinance?

Add your current loan balance to any extra money you want to borrow, then divide by the property's current value. With a $480,000 balance on a home valued at $900,000, the LVR is 53.33%; borrowing an extra $100,000 lifts it to 64.44%. The lender will use its own valuation, which may differ from what you expect.

Why do lenders use the lower of the purchase price and the valuation?

The property is the lender's security, so they assess the loan against what they could reasonably expect it to be worth. If you agree to pay $750,000 but the bank values it at $720,000, the LVR is worked out on $720,000. You'd need a larger deposit to keep the same LVR — in this example, $54,000 more to get down to 80%.

What is LMI and when do I have to pay it?

Lenders mortgage insurance is usually charged when your LVR is above 80%. It protects the lender — not you — if you default and the sale of the property doesn't cover the debt. The premium is a one-off cost that can often be added to (capitalised onto) the loan, which raises your LVR slightly, so this calculator lets you include it.

Can I avoid LMI with less than a 20% deposit?

Sometimes. Some lenders waive LMI for certain professions, such as some medical, legal and accounting professionals, and a guarantor can help. The Australian Government's Home Guarantee Scheme also lets eligible buyers purchase with a smaller deposit without paying LMI; check the current eligibility rules and price caps with Housing Australia or a participating lender.

How can I lower my LVR?

Increase your deposit, choose a cheaper property, or, if you already own, pay down the loan or wait for the property's value to rise. Paying LMI in cash instead of adding it to the loan also keeps your LVR a little lower. When refinancing, keeping cash-out borrowing to a minimum keeps the LVR down.

How much equity can I access to invest or renovate?

Lenders usually talk about usable equity: 80% of the property's value minus what you owe. On a $900,000 home with a $480,000 loan that's $240,000, even though your total equity is $420,000. Borrowing beyond 80% is sometimes possible but usually means paying LMI, and you still need to show you can afford the larger repayments.

What's the difference between LVR and DTI?

LVR compares your loan to the property's value; DTI (debt-to-income ratio) compares your total debts to your gross annual income. Lenders look at both: a low LVR won't get a loan approved if your income can't support the repayments, and a strong income won't remove LMI on a high-LVR loan. Many lenders take a closer look at applications with a DTI of six or more.