Loan-to-value ratio (LVR).

Banks love acronyms. LVR is a good one to know: it stands for ‘loan-to-value ratio’, which is a simple percentage comparison of how much you’re borrowing versus the actual value of the property you’re buying.

For example, if you’re borrowing $340,000 to buy a $400,000 property, your LVR would be 85% (because 340,000 is 85% of 400,000).

Some loans will have a minimum LVR requirement. Also, if your LVR is 80% or higher when you take out your loan, you’ll need to pay an extra fee to cover lenders mortgage insurance.

Loan-to-value ratio (LVR).

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