The ratio
LVR is your loan divided by what the property is worth. It sets whether you pay lenders mortgage insurance and which pricing tier your lender puts you in. Work yours out below. Nothing leaves your browser.
Your best current estimate, not what you paid for it.
The loan balance on your latest statement, across all splits.
Worked out in your browser. Nothing is sent to us and nothing is stored.
Enter both figures and your loan to value ratio appears here, along with how far you are from the 80% mark.
The definition
Loan to value ratio is the amount of a loan as a percentage of the value of the asset it was used to buy, calculated by dividing the loan amount by the value of the asset.1 On a mortgage that means your outstanding balance divided by what the property is currently worth, expressed as a percentage.
It is the single most consequential number in your loan that is not the interest rate, and unlike the interest rate it is one you can move. Lenders use it as their shorthand for risk: the more of the property you already own, the less exposed they are if the loan goes wrong and the property has to be sold.
1 Moneysmart (ASIC), loan to value ratio (LVR), glossary, retrieved 28 July 2026.
The arithmetic
Divide what you owe by what the property is worth, then multiply by 100. That is the whole formula. The calculator above does it, but it is worth seeing done by hand once, because the interesting part is which two numbers you feed it.
This is where most people get a wrong answer. If you paid $610,000 four years ago and still owe $540,000, dividing by the purchase price gives 88.5% and tells you that you are stuck above the threshold. Dividing by what the property is worth now gives 72%, and the difference between those two numbers is worth real money every month. Your lender will use their own valuation rather than yours, so treat your figure as an indication of whether it is worth asking them to revalue.
If your loan is split across two or three accounts, the numerator is all of them added together. Money you have redrawn is money you owe, so it belongs in the balance. Money sitting in an offset account does not reduce your balance for this purpose, even though it reduces the interest you are charged, so leave it out.
What it decides
Lenders mortgage insurance protects the credit provider if a borrower cannot repay their loan. It is usually a one off cost to the borrower, payable when the amount borrowed exceeds 80% of the value of the property, and it does not benefit the borrower at all: it only protects the lender.2 That 80% line is why LVR is worth watching rather than calculating once. What LMI costs and when it stops applying goes into the detail.
Most Australian lenders price home loans in LVR bands. The sharpest advertised rates generally sit in the band below 80%, and sometimes there is a further step below 60%. Crossing a band boundary is one of the few moments where a lender will move your rate on request rather than because you threatened to leave, because their own risk pricing has genuinely changed.
If you are thinking about using the property to fund something else, the 80% line reappears as the boundary of what lenders treat as usable equity. The home equity calculator works that out from the same two figures you just entered.
2 Moneysmart (ASIC), lenders mortgage insurance (LMI), glossary, retrieved 28 July 2026.
Moving the number
There are only two levers, and they pull on opposite ends of the same fraction.
Note that neither lever tells your lender anything. Repricing does not happen automatically when you cross 80%. You have to notice, ask for a revaluation, and then ask for the rate that goes with your new band.
3 Cotality, Home Value Index, July 2026 release, released 1 July 2026, reporting June 2026 data.
The catch
Every calculator on this topic, including this one, gives you a snapshot. The problem is that both of its inputs move: your balance falls every month, and your property value changes with the market around you. A ratio built from two moving numbers is a moving number, and the moment worth acting on is the moment it crosses a band boundary, which is exactly the moment nobody is watching for.
That is the gap. The lender knows when your risk profile improves and has no reason to tell you. Working it out once a year by hand is better than never, and it is still slower than the thing you are trying to catch.
Questions
Anything at or below 80% is the threshold that matters most, because that is the point at which lenders generally stop charging lenders mortgage insurance. Below 80% you are also in the pricing tier most lenders reserve their sharper advertised rates for. Below 60% some lenders offer a further discount, though the gap between 60% and 80% is usually much smaller than the gap across 80%.
Yes, constantly. Your loan balance falls with every principal repayment and your property value moves with the market, so the ratio between them is different every month. Most people work their LVR out once at application and never look again, which is how borrowers stay in an above-80% pricing tier for years after they have left it.
Lenders use their own valuation, not what you paid. At purchase the two are usually close, so the distinction rarely bites. Years later it matters a great deal: if your area has risen, the lender's current valuation is what decides whether you are under 80%, and you generally have to ask them to revalue before they will reprice the loan.
Two levers, and only one of them is in your control. Paying down principal, making extra repayments or using a lump sum reduces the numerator. A rise in your property's value reduces the ratio without you doing anything. Both count equally toward the 80% mark, which is why a rising market can take you under the threshold on its own.
No. Lenders mortgage insurance is a one off premium paid at settlement and it is not refunded when your equity improves. What does change is your pricing: once you are comfortably under 80% you can ask your lender to move you to their lower LVR tier, and you can refinance elsewhere without paying LMI again.
Sources
Market figures are point in time published figures, checked each time this page is reviewed.
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Ratey
Working it out once tells you where you stand today. It moves as your balance falls and the market shifts, and the moments worth acting on are easy to miss. Ratey re-runs your free home loan health check every month against more than 35 Australian lenders, tracks your property value, equity and LVR, and tells you when something is worth doing.
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