Property Purchase Loans
What LVR Applies To Property Loans?
5 min read- Finance Guide
- Updated 2026
Quick answer
Many standard property loans sit around
80% LVR
as a common benchmark for sharper pricing and lower risk
- Common low risk zone Up to 80%
- Higher LVR range 85% to 95%+
- LMI trigger zone Often above 80%
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1300 421 044
Detailed explained
LVR is one of the first things a lender looks at when assessing a property loan. It affects whether the deal fits policy, whether lenders mortgage insurance may apply, how much deposit or equity you need, and in some cases even the interest rate or range of lenders available. A lower LVR usually gives you more choice, while a higher LVR can still be possible but normally needs a stronger overall application.
How LVR works in practice
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LVR is calculated by dividing the loan amount by the lender assessed property value, then converting that figure into a percentage
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If you borrow $640,000 against a property valued at $800,000, the LVR is 80 percent
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If the valuation comes in lower than the purchase price, your LVR may be higher than expected and the lender may reduce the approved loan amount
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Many borrowers aim for 80 percent LVR or lower because this is commonly where LMI becomes less likely and lender options become broader
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LVR SNAPSHOT
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Typical low risk lending zone
up to 80%
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Typical deposit or equity
from 20%
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Above 80% LVR
Lenders mortgage insurance may apply and lender policy can become tighter
How lenders apply LVR
Property Value
01
The lender starts with the contract price or an independent valuation, depending on policy and risk
Deposit or Equity
02
Your cash deposit, existing equity or guarantor support affects how high or low the resulting LVR will be
Risk Assessment
03
Property type, postcode, unit size, condition and borrower profile can influence the maximum LVR the lender will allow
Settlement
04
Formal approval depends on the final LVR still fitting lender policy after valuation, servicing and document checks are complete
What affects the LVR you may get
Deposit size
A larger deposit or stronger equity position lowers LVR and usually improves lender choice
Property type
Houses, standard units and more specialised properties can attract different maximum LVR limits
Location and marketability
Some postcodes or harder to sell properties can lead lenders to cap LVR more conservatively
Loan purpose
Owner occupied and investment loans can be treated differently depending on the lender and product
Credit profile
A cleaner credit history can make higher LVR lending more achievable, while impaired credit often reduces the LVR available
Servicing strength
Even if the LVR works on paper, the loan still has to pass income, expense and debt servicing rules
High debt to income lending cap
From 1 February 2026, APRA requires authorised deposit taking institutions to limit new residential lending at debt to income ratios of six times income or more to 20 percent of new lending in each of the owner occupier and investor portfolios
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How LVR issues can change a deal
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01. A low valuation can push the actual LVR above the lender limit, even if the deal looked fine when you first negotiated the purchase
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02. If that happens, you may need to contribute a larger deposit, accept LMI, change lenders or renegotiate the purchase price
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03. Higher LVR deals can also have tighter rules on postcode, unit size, guarantor use, genuine savings or property condition
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04. The strongest applications usually combine an acceptable LVR with good servicing, clean conduct and a standard, marketable property
Common problems
LVR problems usually appear when the deposit is too small, the valuation comes in short, or the property falls outside standard lending policy. These issues do not always kill a deal, but they often change the lender options, pricing or cash contribution required.
LVR too high
If the loan amount is too high relative to the property value, the lender may decline the deal, reduce the approved amount or require LMI.
Possible solutions include:
Increase the deposit or equity contribution- Use equity from another property if appropriate
- Consider a guarantor structure where suitable
- Choose a lender that accepts higher LVR deals subject to policy
Valuation shortfall
If the lender values the property below the contract price, the effective LVR rises and the approved loan can shrink.
Possible solutions include:
- Contribute more cash to cover the shortfall
- Review whether another lender or valuation method is available
- Renegotiate the price where possible
- Restructure the deal to a lower loan amount
Property policy restrictions
Some properties attract lower maximum LVR limits because of location, postcode concentration, small internal area, unusual zoning or weaker resale appeal.
Possible solutions include:
- Choose a lender comfortable with that property type
- Use a lower LVR structure to fit policy
- Check valuation and postcode sensitivity early
- Consider whether a different property will be easier to finance
Steps to manage LVR well
Step
01
Estimate the purchase price, likely valuation and the cash or equity you can contribute.
Step
02
Work out the likely LVR and whether you want to stay at or below 80 percent if possible.
Step
03
Check whether the property type or postcode may affect the lender’s maximum LVR.
Step
04
Submit the application with evidence of deposit, equity, income and liabilities.
Step
05
Review the valuation carefully because this can change the final LVR.
Step
06
Finalise the structure only once the approved LVR, costs and cash to complete are clear.
Speak with a Property Finance Specialist
The right LVR for a property loan depends on more than the deposit alone. Property type, valuation outcome, loan purpose and lender policy can all change what is realistic.
A specialist can help compare lender appetite, explain how LVR affects cost and risk, and identify structures that make the deal more workable.
Speak with a finance specialist about the right LVR for your property purchase
Submit the short form below and a finance specialist will review your situation and discuss the lender options that may suit your target LVR and deposit position.
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