Mortgage Minute: LVR's
In this mortgage minute we chat about the reserve banks Loan to Value Ratio or LVR's and how to get around them.
LVR's are intended to reduce banks exposure to low equity lending if we get another major downturn in the property market.
The current Reserve Bank rules state that, banks can only lend 15% of their total lending book to those with less than 20% deposit for owner occupied existing properties.
For investors the magic number is actually 35% 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 LVR's.
There are exemptions to the LVR's. 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 441 1307 and book a free appointment to talk through it.