You May Qualify for a Lower Interest Rate – Do You Know Your LVR?

With interest rates on the move and property prices rebounding in many markets, you could be overpaying on your home loan without even realising it. Most borrowers focus on headline rates or fixed vs variable options—but few regularly check their Loan to Value Ratio (LVR). Yet this simple percentage could be the key to unlocking lower interest rates, saving you thousands per year.

At Causbrooks Finance, we specialise in helping Australians—especially business owners and investors—reduce their repayments by reassessing their LVR and refinancing at sharper rates.

What is a Loan to Value Ratio (LVR)?

Your LVR is the percentage of your loan amount compared to the value of the property.

Lenders use this ratio to assess the risk of your loan. The higher the LVR, the greater the risk in the eyes of the lender—and the higher the interest rate you're likely to be charged.

Loan to Value Ratio = (Loan Amount ÷ Property Value) x 100

For instance, if your loan is $600,000 and your property is worth $750,000, your LVR is 80%. But if your property has increased in value to $900,000, your LVR falls to just 66.6%—which could qualify you for a lower interest rate bracket.

Why LVR Affects Your Interest Rate

Most lenders offer tiered pricing based on your LVR.

Here’s a general guide:

• <60% LVR – Access to the lowest interest rates
• 60–70% – Very competitive pricing
• 70–80% – Standard investor/owner-occupier rates
• >80% – May be charged Lenders Mortgage Insurance (LMI) and higher interest rates

When your LVR improves, your loan is considered lower risk, so lenders are more willing to offer you a better deal.

For borrowers, that often means refinancing at a rate that could save thousands over the life of the loan.

Has Your LVR Improved? Here’s Why It Might Have

Many borrowers assume their LVR stays the same—but that’s rarely true over time.

Here are some reasons it may have improved:

Property value has increased

If your suburb has boomed, your bank valuation could be significantly higher than when you first bought.

Loan amount has decreased

If you've made regular or extra repayments, you’ve reduced your balance—and your LVR.

You've renovated or upgraded

A new kitchen or bathroom can lift your market value, even if your loan hasn’t changed.

In today’s property market, this means many Australians who were once above 80% LVR could now be in a lower tier—and overpaying on their mortgage without knowing.

Why Lower LVR = Lower Interest Rate

A lower LVR signals less risk to a lender. In return, many lenders reward you with a lower rate.

Here’s a simple example:

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That’s a saving of $18,000 over 10 years—just for reassessing your loan based on a stronger LVR.

What about Lenders Mortgage Insurance (LMI)?

If your LVR is above 80%, most lenders will charge Lenders Mortgage Insurance—a one-off premium that protects the lender, not you. Some borrowers can still access competitive rates, but they’ll need to pay LMI upfront or roll it into the loan amount.

If your LVR has dropped below 80%, you can often refinance and avoid LMI entirely. That’s another reason to reassess your position regularly.

How to Check Your Current LVR

Here’s how you can calculate it quickly:

1. Get your current loan balance (check your online account or statement)
2. Estimate your current property value (use recent sales or get a bank valuation)
3. Divide loan by value, then multiply by 100

For example:
Loan balance = $480,000
Estimated property value = $800,000
LVR = (480,000 ÷ 800,000) × 100 = 60%

Once you know your LVR, you can compare it against your lender’s pricing tiers—or speak to a broker to check how you stack up in the current market.

What If You’re Not Under 80% Yet?

You still have options.

You may:

• Top up your deposit to reach a lower LVR bracket
• Improve your borrowing capacity by reducing debts or restructuring income
• Look for lenders who specialise in high LVR loans or who may offer family guarantee options

We can also help calculate whether it's worth paying LMI now to access a better property or rate, depending on your overall financial situation.

How Causbrooks Finance Can Help

At Causbrooks Finance, we:

• Run a free LVR check and property value estimate
• Assess whether you’re eligible for lower interest rates
• Help you navigate refinancing, compare lender offers, and switch seamlessly
• Provide strategic advice for investment property or owner-occupier loans

We know how market valuation, credit history, and even your loan application setup can affect your result. That’s why our broker support is tailored for business owners, investors, and self-employed professionals.

Your Loan to Value Ratio plays a huge role in what you pay—and if you haven’t reviewed it recently, you could be missing out on real savings. Even without changing properties, your position may have improved dramatically in today’s property market.

Don’t leave money on the table.

Let Causbrooks Finance check your LVR, reassess your borrowing capacity, and help you refinance if a better deal is available.