LVR, Loan-to-Value Ratio
- LVR is the loan amount divided by the property value.
- The property value is your estimate. A lender relies on its own valuation.
- Any LVR you enter is illustrative, not an Archer policy limit.
Illustrative estimate only, based on the inputs and assumptions shown. This is not a quote, credit approval or commitment to lend. Actual interest, fees, repayments and terms may differ. Costs not included are listed below.
- Fees, costs and capitalised interest added to the loan, which raise the LVR
- Other debt secured on the same property
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.
Gross vs net LVR
LVR is always calculated gross, including all amounts extended, capitalised interest, and fees. A bridging loan with 6 months of interest capitalised monthly at 9% a year, on a $1m property starting at "65% LVR", exits at about 68% gross LVR before fees. 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.