01 Borrowing & leverage Reviewed 30 August 2026
Loan-to-value ratio
LVR
The loan amount as a percentage of the property value used by the lender.
What LVR means
LVR tells you how much of the property is debt-funded. A 75% LVR means the loan equals three-quarters of the lender’s property value.
02 / Worked example
How it is calculated
(Loan amount ÷ lender property value) × 100
Loan $450,000 Property value $600,000 LVR 75%
$450,000 ÷ $600,000 × 100 = 75% LVR
Why it matters
Lenders use LVR when assessing the risk of a home or investment loan. It can affect the deposit required, loan pricing and whether lender’s mortgage insurance applies.
Take the next step
Ask Heyward A definition cannot see your position. Heyward can.
Start with: “What does my current LVR mean for my borrowing headroom?”
04
Sources
Primary & official where available- ASIC Moneysmart Loan to value ratio (LVR)
- ASIC Moneysmart Save for a house deposit
General educational information only. It does not account for your objectives, financial situation, legal position or tax circumstances.