You are here: Home Tools Glossary Loan to Value Ratio or LVR

Loan to Value Ratio or LVR

Loan divided by the security value of the property that is offered as collateral for the loan, expressed as a percentage.

The security value is a lender’s assessment of the value of the property that it is offered as collateral for its loan. Security value sometimes excludes chattels (furniture, carpets, light fittings, drapes etc).

Lenders use a differing range of criteria in determining security value.  In some cases lenders will accept the purchase price or rateable value but in other cases lenders will require the market value to be assessed by a registered valuer.