04 — LVR & Deposit
LVR and deposit calculator.
Enter a property value and deposit to see your loan-to-value ratio, whether lenders mortgage insurance applies, and how much more deposit you need to cross the 80% threshold.
02 · What LVR controls
What LVR actually controls.
LVR — loan-to-value ratio — is the single most important number on the lender's side of your application. It's the loan amount divided by the property value, expressed as a percentage. A $480,000 loan against a $600,000 property is 80% LVR. The number above the calculator is that percentage, derived from your inputs.
The 80% threshold
At or below 80% LVR, lenders treat the loan as standard. Above 80%, two things change. First, the lender will require Lenders Mortgage Insurance (LMI) — a one-off premium paid by you that protects the lender, not you, if the loan defaults and the sale doesn't cover the balance. Second, the rate tier shifts: many lenders reserve their sharpest rates for borrowers at or below 80% LVR, with progressively higher pricing above 80%, 85%, and 90%.
How LMI is priced
LMI is not a flat percentage. The premium scales steeply with LVR — going from 85% to 95% can double or triple the premium for the same loan size. It also scales with loan amount; a small loan at high LVR carries a smaller absolute premium than a large loan at high LVR. Most lenders allow LMI to be capitalised onto the loan rather than paid in cash, which means the premium itself is then financed at the loan's interest rate over the loan's term.
When higher LVR is the right call
Waiting to save a 20% deposit is the textbook answer, and on a rising market the textbook answer is sometimes wrong. If the property you can afford today moves 6% in a year, the additional deposit you need to clear 80% rises faster than your savings do. LMI is a real cost; the cost of waiting is sometimes a larger one. The calculation is specific to your numbers, your timeframe, and the segment of the market you're looking at.
03 · LVR thresholds
| LVR band | LMI | What it means |
|---|---|---|
| ≤ 60% | No | Premium rates; most competitive lender pricing. |
| 60.01 – 70% | No | Competitive rates across most mainstream lenders. |
| 70.01 – 80% | No | Standard rates; full product choice available. |
| 80.01 – 85% | Yes | LMI applies. Est. premium ~0.60% of loan amount. |
| 85.01 – 90% | Yes | LMI applies. Est. premium ~1.25% of loan amount. |
| 90.01 – 95% | Yes | LMI applies. Est. premium ~2.20% of loan amount. Fewer lender options. |
| > 95% | Yes | Very restricted. Specialist lenders only. First Home Guarantee may allow 95% without LMI for eligible buyers. |
LMI premium estimates are approximate indicative ranges only — actual premiums vary by insurer, lender, and loan purpose. Confirm with your broker before committing to a purchase price.
04 · Assumptions
05 · Disclaimer
The conversation
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