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What is a Loan to Value Ratio (LVR)?

LVR is a commonly used acronym in the mortgage and property industry, but do you know what it means or how it applies to home purchases?

LVR stands for Loan to Value Ratio. It is the percentage of the money you borrow for a home loan compared to the value of the property. It is used to assess your risk factor as a borrower; lenders will calculate your LVR before deciding whether or to approve you for a home loan. The higher your LVR is, the more of a risk you may be to your lender