Understanding 60% LVR
A 60% loan-to-value ratio means the loan represents 60% of a property's value. Learn how to calculate 60% LVR and understand what it means for the loan amount, property value, equity and refinancing.
What does 60% LVR mean?
LVR compares a loan amount with the value of the property securing the loan.
A 60% loan-to-value ratio
A 60% LVR means the loan amount is equal to 60% of the property's value.
The remaining 40% represents the mathematical difference between the property's value and the loan amount.
For example, a property valued at $500,000 with a $300,000 loan has an LVR of 60%.
60% LVR Formula
To calculate a loan amount at a target LVR of 60%, multiply the property value by 0.60.
How is 60% 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 60% LVR
Enter a property value to see the corresponding 60% loan amount and 40% difference.
How much is a 60% loan?
At a target LVR of 60%, the loan amount is 60% of the property value.
The remaining 40% is the mathematical difference between the property value and loan amount.
This calculation is illustrative and does not indicate lending approval or borrowing capacity.
60% LVR examples by property value
The LVR remains 60%, while the corresponding loan amount changes with the property value.
| Property Value | 60% Loan | 40% Difference |
|---|---|---|
| $300,000 | $180,000 | $120,000 |
| $400,000 | $240,000 | $160,000 |
| $500,000 | $300,000 | $200,000 |
| $600,000 | $360,000 | $240,000 |
| $750,000 | $450,000 | $300,000 |
| $1,000,000 | $600,000 | $400,000 |
What does 60% LVR mean for a deposit?
A 60% LVR means the loan represents 60% of the property's value. The mathematical difference is 40%.
Example property value.
60% of the property value.
40% of the property value.
The 40% difference should not automatically be interpreted as the total cash required to purchase a property. Taxes, legal costs, valuation charges, insurance, fees and other transaction expenses may also apply depending on the situation.
Explore Deposit Calculations →60% LVR and equity
If the outstanding loan equals 60% of the property's current value, the mathematical difference is 40%.
Suppose a property is currently valued at $500,000 and the outstanding loan balance is $300,000.
In this simplified example, the difference represents 40% of the property's value.
Calculate Your Equity →Why equity can change
Equity is based on the relationship between the property's current value and outstanding debt.
If the property value changes or the loan balance is reduced, the resulting LVR and equity position can change as well.
For this reason, use current estimates when assessing your position.
60% LVR when refinancing
LVR can also describe the relationship between a proposed refinance loan and the property's current value.
Example
If a property is valued at $800,000 and the proposed new loan is $480,000:
Important to remember
A 60% LVR describes the loan-to-value relationship. It does not guarantee refinance approval, a specific interest rate, fees, insurance treatment or any other lending outcome.
Compare Refinance LVR →Is 60% LVR considered a low LVR?
A 60% LVR means the loan represents 60% of the property's value, which is a lower loan-to-value position than higher-LVR scenarios.
Why the percentage matters
LVR provides a simple way to compare the size of a loan with the value of the property.
A lower LVR means the loan represents a smaller proportion of the property's value.
LVR is only one factor
Actual lending decisions can also consider income, expenses, credit history, property characteristics, loan type, lender criteria and applicable requirements.
60% LVR compared with other levels
Comparing LVR percentages helps put a 60% position into context.
Related LVR guides
Learn more about LVR, equity, deposits and mortgage insurance.
Key terms related to 60% LVR
Understanding these terms makes LVR calculations easier to interpret.
60% LVR FAQs
What does 60% LVR mean?
A 60% LVR means the loan amount is equal to 60% of the property's value. The mathematical difference between the property value and loan amount is 40%.
What is 60% LVR on a $500,000 property?
A 60% LVR on a $500,000 property corresponds to a $300,000 loan because $500,000 × 0.60 equals $300,000.
What is the deposit for a 60% LVR?
In a simplified calculation, a 60% loan represents 60% of the property value and the difference is 40%. Actual cash required for a purchase may also include taxes, fees and other transaction costs.
How much equity is represented by 60% LVR?
If the property's current value and outstanding loan produce a 60% LVR, the difference between them is 40% of the property value.
Is 60% LVR considered a low LVR?
A 60% LVR means the loan represents 60% of the property's value. It is a lower loan-to-value position than higher LVR percentages, although whether it is considered favorable depends on the lender, loan type, borrower and other factors.
Can I refinance at 60% LVR?
A proposed refinance loan can have a 60% LVR if the new loan amount equals 60% of the property's current value. Refinancing approval depends on applicable lending criteria and circumstances.
What is your current LVR?
Enter your property value and loan amount to calculate your current loan-to-value ratio.
Calculate My LVR →