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Think of the Loan to Value Ratio (LVR) like this:  What percentage of the house is covered by the mortgage…  Or, in other words, what percentage of the house does the bank own?

If your house is worth $400,000 and your mortgage is worth $300,000, then your Loan to Value Ratio or LVR is 75% because the bank has lent you 75% of your house.

If the value of your house increases to, for example, $500,000, your new Loan to Value Ratio is 60% (because $300,000 is 60% of the new value – $500,000).

How much LVR will banks lend to me?

Currently banks will happily lend up to 80% against the house you live in but will sometimes go as high as 90% or even 95%.  Most banks will lend up to 70% against any investment properties although there are exception to this.

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