Understanding 90% LVR
A 90% loan-to-value ratio means the loan represents 90% of a property's value. Learn how to calculate 90% LVR and understand what it means for loan amounts, deposits, equity, mortgage insurance and refinancing.
What does 90% LVR mean?
LVR compares a loan amount with the value of the property securing the loan.
A 90% loan-to-value ratio
A 90% LVR means the loan amount is equal to 90% of the property's value.
The remaining 10% represents the mathematical difference between the property's value and the loan amount.
For example, a property valued at $500,000 with a $450,000 loan has an LVR of 90%.
90% LVR Formula
To calculate a loan amount at a target LVR of 90%, multiply the property value by 0.90.
How is 90% LVR calculated?
Once you know the property value and loan amount, calculating LVR is straightforward.
Divide the loan amount by the property value and multiply by 100:
Calculate the loan amount at 90% LVR
Enter a property value to see the corresponding 90% loan amount and 10% difference.
How much is a 90% loan?
At a target LVR of 90%, the loan amount is 90% of the property value.
The remaining 10% is the mathematical difference between the property value and loan amount.
This calculation is illustrative and does not indicate lending approval or borrowing capacity.
90% LVR examples by property value
The LVR remains 90%, while the corresponding loan amount changes with the property value.
| Property Value | 90% Loan | 10% Difference |
|---|---|---|
| $300,000 | $270,000 | $30,000 |
| $400,000 | $360,000 | $40,000 |
| $500,000 | $450,000 | $50,000 |
| $600,000 | $540,000 | $60,000 |
| $750,000 | $675,000 | $75,000 |
| $1,000,000 | $900,000 | $100,000 |
What does 90% LVR mean for a deposit?
At a 90% LVR, the loan represents 90% of the property's value and the mathematical difference is 10%.
Example property value.
90% of the property value.
10% of the property value.
In a simplified calculation, the difference at 90% LVR is 10% of the property value. This should not automatically be treated as the complete cash required to purchase a property. Taxes, legal costs, valuation charges, insurance, lender fees and other expenses may also apply.
Explore Deposit Calculations →90% LVR and equity
If the outstanding loan equals 90% of the property's current value, the mathematical difference is 10%.
Suppose a property is currently valued at $500,000 and the outstanding loan balance is $450,000.
In this simplified example, the difference represents 10% of the property's value.
Calculate Your Equity →Equity can change over time
Equity depends on the relationship between the property's current value and outstanding debt.
If the property value increases or the loan balance decreases, the resulting LVR may fall. If the property value decreases or debt increases, the LVR may rise.
Use a current property value and current loan balance when calculating an updated position.
Does 90% LVR affect mortgage insurance?
Mortgage insurance requirements vary by country, lender, loan type and borrower circumstances.
A 90% LVR may be an important factor when assessing a lending scenario. However, there is no universal rule that applies to every lender or jurisdiction.
At a higher LVR, it is particularly important to check the specific insurance requirements and costs that may apply to the loan.
Explore LVR & Insurance →LVR and mortgage insurance are different
Mortgage insurance, where applicable, is a separate lending consideration. The applicable lender determines whether insurance is required, how it is calculated and who is responsible for the cost.
90% LVR when refinancing
A proposed refinance loan can also be expressed as an LVR based on the property's current value.
Example
If a property is valued at $800,000 and the proposed new loan is $720,000:
Refinancing depends on more than LVR
A 90% LVR describes the relationship between a proposed loan and property value. It does not guarantee refinance approval, interest rates, fees or any particular lending outcome.
A lender may also consider income, credit, existing debt, property characteristics and other criteria.
Compare Refinance LVR →Is 90% LVR considered a good LVR?
There is no single LVR that is automatically right for every borrower or property.
What a 90% LVR represents
At 90% LVR, the loan represents nine-tenths of the property's value and the mathematical difference represents one-tenth.
This makes 90% a useful reference point when comparing borrowing scenarios and understanding how loan size changes with property value.
Higher LVR means greater leverage
Compared with an 80% or 85% LVR, a 90% LVR represents a larger loan relative to the same property value.
Depending on the lender and jurisdiction, a higher LVR may affect available products, pricing, insurance requirements or other lending considerations.
90% LVR compared with lower LVR levels
Using the same property value makes the difference between LVR levels easy to see.
Loan on a $500,000 property.
Loan on a $500,000 property.
Loan on a $500,000 property.
90% LVR compared with other levels
Comparing percentages helps show how the loan amount changes for the same property value.
Related LVR guides
Explore the fundamentals behind loan-to-value calculations and related property finance concepts.
Key terms related to 90% LVR
Learn the terminology commonly used when discussing LVR, property value and borrowing.
90% LVR FAQs
What does 90% LVR mean?
A 90% LVR means the loan amount is equal to 90% of the property's value. The mathematical difference between the property value and loan amount is 10%.
What is 90% LVR on a $500,000 property?
A 90% LVR on a $500,000 property corresponds to a $450,000 loan because $500,000 × 0.90 equals $450,000.
What is the deposit for a 90% LVR?
In a simplified calculation, a 90% loan means the mathematical difference is 10% of the property value. Actual cash required for a purchase may be different because taxes, fees and other costs can apply.
Is 90% LVR a good LVR?
Whether 90% LVR is suitable depends on the borrower's circumstances, loan structure, property and applicable lender criteria. LVR is only one part of a lending assessment.
Does 90% LVR affect mortgage insurance?
It can affect mortgage-insurance considerations depending on the lender, country and loan product. There is no universal rule that applies to every 90% LVR loan.
How much equity is represented by 90% LVR?
If the outstanding loan produces a 90% LVR, the mathematical difference between the loan and property value is 10% of the property's value. Actual equity should be calculated using the current property value and outstanding loan balance.
Can I refinance at 90% LVR?
A proposed refinance loan can have a 90% LVR if the new loan amount equals 90% of the property's current value. Whether refinancing is available depends on applicable lending criteria and individual circumstances.
Is 85% LVR lower than 90% LVR?
Yes. An 85% LVR means the loan represents 85% of the property's value, while a 90% LVR means it represents 90%. For the same property value, a 90% LVR corresponds to a larger loan amount.
What is the difference between 80% and 90% LVR?
The difference is 10 percentage points. On a $500,000 property, an 80% LVR corresponds to $400,000 while a 90% LVR corresponds to $450,000.
What is your current LVR?
Enter your property value and loan amount to calculate your current loan-to-value ratio.
Calculate My LVR →