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LVR calculator: what is LVR and how do I calculate mine?
LVR — loan-to-value ratio — is the first number any property lender looks at. Work out yours in seconds, including the combined LVR for a caveat loan or second mortgage.
What is LVR?
LVR stands for loan-to-value ratio. It measures how much is owed against a property compared with what the property is worth, expressed as a percentage. Owe $300,000 on a home worth $750,000 and your LVR is 40%. The other 60% is your equity — the part of the property that's yours.
Every property lender uses it, from the big banks to private lenders, because it tells them how much cushion sits between the loan and the property's value. The more cushion, the safer the loan looks and the easier it is to approve.
How do I calculate my LVR?
The formula is simple: total loans ÷ property value × 100.
- Find your current mortgage balance (your latest statement or app shows it).
- Add the new amount you want to borrow.
- Divide the total by a realistic property value.
- Multiply by 100 to get a percentage.
Illustrative example: a home worth $1,000,000 with $420,000 owing has a current LVR of 42%. Add a $200,000 short-term loan and the combined LVR becomes 62% ($620,000 ÷ $1,000,000).
What is combined LVR, and why does it matter for a caveat loan?
When you borrow behind an existing mortgage — with a caveat loan on Victorian property or a short-term second mortgage anywhere else — the lender looks at combined LVR: the bank loan plus the new loan, against the value. That's the number that decides how much room there is. Our explainer on how equity is calculated goes deeper, including payout figures and costs.
What LVR do private lenders work to?
It depends on the property more than anything. A standard house in a capital city suburb usually allows more room than a commercial unit, which in turn allows more than rural land or a vacant block, because some properties take longer to sell. That's why the calculator lets you pick a guide ratio for the property type. Treat it as a planning figure: the real number is confirmed after the valuation and once the lender understands how the loan will be repaid.
How to use your LVR
- Low combined LVR? You likely have room for a short-term loan — try the borrowing room calculator to see the structure that fits your state.
- Close to the guide? A second property as extra security, or a smaller loan, can bring it back into range.
- Above the guide? Refinancing everything into one short-term first mortgage sometimes works better than sitting behind the bank.
We're the lender, so the person who reads your enquiry is the one who decides. There's no credit check when you first enquire, and it takes about 60 seconds. See if you qualify →
Frequently asked questions
What does LVR stand for?
LVR stands for loan-to-value ratio. It's the amount owed against a property shown as a percentage of the property's value. A $400,000 loan on an $800,000 property is an LVR of 50%.
How do I calculate my LVR?
Divide the total loan amount by the property's value and multiply by 100. If you already have a mortgage and want to add a second loan, add both loans together first — that gives your combined LVR, which is the figure a caveat or second mortgage lender looks at.
What is combined LVR?
Combined LVR counts every loan secured on the property — the existing bank mortgage plus the new caveat loan or second mortgage — divided by the property's value. It shows how much of the property is already spoken for.
What LVR do I need for a caveat loan or second mortgage?
There's no single number. Lenders look at the combined LVR alongside the property type, location and the exit. Standard homes in good locations usually allow more room than commercial, rural or vacant land. Our calculator shows where you sit and a specialist confirms the real figure after a valuation.
Which value do lenders use — my estimate, the council valuation or a bank valuation?
Lenders use their own valuation, ordered from a valuer. Council and rating valuations are done for rates, not lending, and agent appraisals are a useful guide only. Use a realistic estimate in the calculator — a cautious figure gives a number you can plan around.
Does a lower LVR mean a better outcome?
Generally, yes. A lower LVR means more equity cushion, which usually makes approval easier and gives more options on structure and timing.
Is my information saved?
No. The calculator runs in your browser only. Nothing you enter is stored or sent.
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