Mortgage Minute: Explaining LVRs
In this Mortgage Minute, we chat about the Reserve Bank's Loan to Value Ratio or LVRs and how to get around them.
LVRs are intended to reduce the banks exposure to low equity lending if we get another major downturn in the property market.
From January 1st 2019, the Reserve Bank rules allow banks to increase their lending capacity for people with less than 20% deposit from 15% to 20% of their new lending for owner occupied existing properties.
For investors the minimum deposit is now 30%, but at Loan Market we work with a wide range of lenders and have options for a 20% deposit through lenders not restricted by the LVRs.
There are exemptions to the LVRs. Building or buying a new home off the plans is exempt, meaning there is always funding available with less than a 20% deposit.
Sound confusing? It often is, and it's one of the main areas we here at Loan Market support our clients with. So give us buzz on 03 441 1307 and book a free appointment to talk it through.