Glossary · Australian property
Loan-to-value ratio (LVR).
The percentage of a property's value that's financed by a loan. Loan amount ÷ property value × 100.
LVR = loan ÷ property value. On a $700K purchase with $560K loan, LVR = 80%. Higher LVR = less buyer skin-in-the-game, more lender risk.
Key thresholds: 80% LVR is the no-LMI ceiling for most lenders. 90% is the standard high-LVR with LMI. 95% is the maximum for most retail lenders, or the LVR HGS targets. Above 95% only some specialist lenders.
Property valuation matters. Lenders order their own valuation (usually below contract price by 5-10% in tighter markets). LVR is calculated on the LOWER of contract price or valuation, so a low valuation can push LVR above the 80% threshold and trigger LMI even on a 20% deposit.
Source
APRA APG 223 + industry-standard lender policy.
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