When lenders talk about mortgage deposits they refer to loan to value ratio (LVR). LVR is the loan amount divided by the value of the property. Let’s say you want to buy a property with a purchase price of $200,000. If you have a deposit of $40,000, your LVR is 80% (160k/200k).
The Critical LVR – 80%
The critical LVR figure as far as lenders are concerned is 80%. If you don’t have 20% of the purchase price as a deposit, you will generally be required to pay for lenders mortgage insurance (LMI).
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