Loan-To-Value Ratio
The Loan-to-value ratio is the percentage amount of the value of a property that a financial institution will allow you to borrow for home loans. The higher the loan-to-value ratio the less deposit is required. An example of this is a loan-to-value ratio of 87 percent means that the borrower will need to outlay at least 13 percent of the total value of the property, in order to be approved for this home loan. Loan-to-value ratio is also commonly referred to as LVR.
Every financial institution will offer loans with different loan-to-value ratios so it pays to compare home loans online.
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