Frequently Asked Questions
How Do I Calculate LVR?
You calculate the LVR is calculated by dividing the loan amount by the actual purchase price or valuation of the property, then multiplying it by 100.
For example, let’s say that you’d like to borrow $240,000 and the property you’re using as security is valued at $300,000.
The LVR of the home loan would be calculated like this:
($240,000 loan ÷ $300,000 property value) x 100 = 80% LVR.
When will I be charged LMI?
Lenders Mortgage Insurance (LMI) generally applies for home loans with an LVR of 80% and above.
Home loans for 80% LVR and above are considered to be a high-risk LVR by most lenders.
The reason is that if you were to default on your mortgage, the mortgage insurer charges the lender a risk fee, which is passed on to you as an LMI premium.
For low doc loans, the borrower lacks the necessary documentation required to prove their earnings and income.
This means that the risk is greater for the lender, and as such, LMI is required at 60% of the property value and above.
Does LVR Affect Your Borrowing Power?
Yes, it does.
Lenders place a large emphasis on the LVR when assessing your loan application. The lower the LVR, the lower the risk is to the bank, hence you’re likely to get better rates with a low-LVR home loan.
A low LVR usually means you’ve saved up a larger deposit.
Why Choose Inovayt
Simple
Finding the right financing to match your needs and goals is never an easy task. Our team prides themselves on finding the right solution for each client, regardless of their personal situation.
Flexible
Our brokers work hand in hand with our clients, to ensure they receive the best possible outcome. We are available to chat face to face, online, or via phone, at a time that suits you.
Solutions-driven
Our focus is always about achieve the best possible outcomes for our clients. We will tackle any hurdles that may come up, to ensure that you are satisfied and have achieved your desired outcome.
