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Compare 85% lvr home loans

Find and compare 85% LVR home loans from a wide range of Australian lenders that suit your needs, whether you're investing, refinancing or looking to buy your first home. Compare interest rates, mortgage repayments, fees and more.

Mark Bristow
Mark Bristow

Personal Finance Editor

Content updated

Product data updated

Find and compare 85% LVR home loans

Most mortgage lenders prefer that you pay an upfront deposit of at least 20 per cent of a property’s value when you apply for a home loan. However, by the time you’ve saved up this deposit, your dream house may have been sold to someone else, or its price may have increased.

Depending on your personal financial situation, a home loan with a Loan to Value Ratio (LVR) of 85 per cent could be an effective compromise, as you’ll only need to save a deposit of 15 per cent. A few lenders may even choose to waive the LMI charge in order to secure your business, though other terms and conditions may apply.  

Why an 85 per cent LVR home loan?

Lower rates and better features

Generally, the more money you can pay as a deposit on a property, the better the home loan deals that may be available to you. Some of the lowest interest rates and the most flexible home loan features may only be available to borrowers with an LVR of 80 per cent or less.

Because a 15 per cent deposit is relatively close to the 20 per cent benchmark to avoid LMI, some lenders may be willing to negotiate with selected borrowers who can demonstrate financial security in other areas. You may be able to pay a little less up front, and enjoy a lower interest rate than you would with an LVR of 90 per cent or 95 per cent, or more flexible home loan features.

Waived LMI

Additionally, some mortgage lenders may offer to waive the cost of LMI on an 85 per cent LVR mortgage as an incentive to attract your business. Saving a smaller deposit then paying no LMI can make a big difference to your financial situation, and may allow a borrower to make a purchase where they otherwise could not.

Of course, these offers may not be available to everybody, or suited to every borrower. You may need to be a first home buyer, or fulfil other terms and conditions to qualify for an 85 per cent LVR home loan deal with no LMI. A mortgage broker may be able to look at your personal finances and determine which offers may be right for your and your needs.

What’s the difference between an 85 per cent LVR home loan and an 80 per cent LVR home loan?

While a difference of 5 per cent may not sound like much, it can make a big impact on the time and effort it takes to save your deposit.

For example, imagine purchasing a hypothetical property for $500,000. Here’s how long it may take to save up different deposits (assuming you’re saving $1000 per month in a savings account with a 2 per cent interest rate), and how much you may have to pay in LMI: 

 Deposit percentageDeposit amount Time to save Cost of LMI Combined upfront cost 
20% (LVR 80%) $100,000 7 years and 8 months $0 $100,000 
15% (LVR 85%) $75,000 5 years, 10 months $4887 $79,887 
10% (LVR 90%) $50,000 4 years, 0 months$8775 $58,775 
5% (LVR 95%) $25,000 2 years, 0 months $16,245 $35,245

Keep in mind that some lenders may offer to waive the cost of LMI for an 85 per cent LVR home loan, reducing some of your upfront costs. Also, remember that the higher your LVR, the higher the interest rates you may need to pay on your home loan.

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^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, target market determination fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.