LVR, Loan-to-Value Ratio
Loan-to-Value Ratio for any property + loan combination, or solve for the maximum loan at a target LVR. Includes a band indicator showing where the result sits in the standard private-credit envelope.
What LVR tells you
LVR, Loan-to-Value Ratio, is the simplest measure of how much room a lender has if a deal goes wrong. At 60% LVR, the property would need to fall 40% in value before the lender's principal is at risk; at 80% LVR, only a 20% fall does the same damage. Lower LVR = safer position for the lender, usually = sharper pricing for the borrower.
Standard private-credit LVR envelope
In Australian private credit, standard maximum LVRs vary by security type. The reference envelope across most non-bank lenders looks roughly like this:
- Prime residential houses (metro): up to 70-75% LVR
- Apartments / units: up to 65% LVR
- Regional or specialist residential: up to 60-65% LVR
- Commercial property: up to 60-70% LVR depending on tenant covenant and lease tail
- Vacant land: up to 60% LVR
- Second mortgages: up to 80% combined LVR (first plus second)
These are starting points, not commitments. Stretches above the standard envelope happen, but they're approved file by file with structuring (additional security, reduced term, tighter covenants, sponsor recourse).
Gross vs net LVR
LVR is always calculated gross, including all amounts extended, capitalised interest, and fees. A bridging loan with 6 months of capitalised interest on a $1m property starting at "65% LVR" might exit at 71% gross LVR. The credit team underwrites the gross figure, not the headline advance amount. This is why bridging files are sized backwards from the documented exit value, not forward from the entry.