What is a 70% LVR home loan?
A 70% loan-to-value ratio (LVR) home loan is one where you as a homebuyer or refinancer provide a deposit or equity worth at least 30% of your property’s value in order to borrow the remaining 70%. Thus, your mortgage will represent 70% or less of your property’s value.
Can I refinance with an LVR of 70%?
If you already have a home loan, you can likely refinance your home loan with an LVR of 70% or less. In fact, refinancing with an LVR of 70% could be an opportunity to save some money on your current home loan.
Say you purchased your home a few years ago with a deposit of 20% and an LVR of 80%, but you’ve now built up some equity in the property, and maybe even saved up some cash.
Refinancing to a loan with an LVR of 70% could give you access to a lower rate than you’re paying, allowing you to save money over the life of the loan.
Just beware of any fees you’ll need to pay when refinancing (including break fees if you’re refinancing out of a fixed rate) to make sure there’s don’t eat up any saving you could make by refinancing.
What to know about 70% LVR home loans
Historically, an 80% LVR (a 20% deposit) has been considered the mortgage ‘sweet spot’, and an even larger deposit is generally looked upon even more favourably.
Banks and lenders tend to reserve their sharpest rates for borrowers with the greatest deposits, so if you’re purchasing or refinancing with a deposit of 30% (and an LVR of 70%), you’re probably in a fairly good position to negotiate a favourable rate.
Do you need to pay Lenders Mortgage Insurance (LMI) with a 70% LVR?
If you purchase a property with a deposit of less than 20%, banks and lenders may require you to pay Lenders Mortgage Insurance (LMI). Fortunately, buying with a deposit of 30% (and therefore a 70% LVR) means that borrowers are likely to view you as a safer borrower, so you’re unlikely to be charged LMI.
How to compare 70% LVR home loans
Comparing 70% LVR home loans is simple with Canstar. Just scroll to the top of this page, select your loan purpose, and follow the prompts. We’ll present a selection of mortgage products that might fit your needs.
Alternatively, you can browse products open to borrowers with LVRs of 70% on the table above.
What’s a good 70% LVR interest rate?
Interest rates on 70% LVR home loans tend to be lower than the average. They might be lower than those offered to those borrowing at a standard 80% LVR, and well below interest rates on 90% or 95% LVR home loans.
Don’t forget the comparison rate
Just as you shouldn’t judge a book by its cover, you shouldn’t judge a home loan by its interest rate alone. A loan with a low advertised interest rate can be appealing at first glance, but when you factor in the fees and charges, it could end up a lot costlier than you bargained for.
That’s why it’s vital to check a loan’s comparison rate. This is a percentage figure that combines the cost of interest as well as routine fees and charges to provide a reflection of the ‘true cost’ of a mortgage. Lenders are required by law to display a comparison rate alongside any advertised interest rate, so you won’t have to go searching for it.
What else should I consider when comparing mortgage options?
There’s no one-size-fits all option for mortgages–the best mortgage for you is one that fits your needs and budget at your stage of life, and has features that will help you meet your financial goals. In other words, you’ll need to look beyond the interest rate to find the loan that’s best for you. Questions you might ask yourself include:
- How long do I want to spend repaying my home loan?
A longer loan term may mean lower regular repayments, whereas a shorter term will mean higher regular repayments, but potentially a lot less spent on interest over time. - Do I plan to make extra repayments?
If you want to pay more towards your mortgage each week, fortnight, or month, or make lump sum repayments down the track, you might want a home loan with a redraw facility. These let you ‘redraw’ extra repayments if you find yourself in need of cash. - Would I like the option to reduce interest costs using my cash savings?
Some home loans provide offset accounts. These act like savings accounts, but instead of earning interest, the money you park in one of these accounts will ‘offset’ the principal of your home loan. This means you can reduce your interest repayments, but have access to your cash if you need it. - Would I prefer repayment certainty or flexibility?
Variable rates can change over time, meaning a home loan’s repayments can rise and fall, while fixed rates will remain the same for a set period of time. You’ll need to think about the tradeoff between certainty and flexibility, or you could opt for a split loan, to have a degree of certainty in your repayments while having access to features like offset and redraw via the variable portion of your loan. - Do I need extra flexibility from my home loan lender?
Some lenders may allow a borrower to ‘tweak’ their mortgage without the need to refinance. For instance, a top-up feature may let you borrow against your equity in the future without a whole new application. Or, if you plan to move soon, home loan portability could let you transfer your existing loan to a new property.
Am I eligible for a 70% LVR home loan?
When considering if you’re eligible for any kind of home loan, lenders will generally want to get a picture of your finances and assess how trustworthy you are as a borrower. When you are applying for a home loan (or preapproval), you’ll be asked to provide documents like payslips, bank and credit card statements, as well as a breakdown of your regular expenses and any assets and debts you have. Lenders will also check your credit score when you apply for a loan.
Generally, if you can show you’re capable of repaying a home loan and you’re responsible with your finances, you have a good chance of securing a mortgage.
Though, if you want to access a home loan with a maximum LVR of 70%, you’ll also need to have a deposit or equity worth at least 30% of the value of the property you want to purchase or refinance (or have someone willing to act as a home loan guarantor).
How to calculate your home loan LVR
Wondering what your potential or actual LVR is? To calculate yours, simply divide how much you’d need to borrow by the value of the property you’re considering buying or refinancing, then multiply the outcome by 100.
Say you have a $180,000 deposit and want to buy a $600,000 property–you’d need to borrow $420,000 to get the purchase across the line. Here’s how you’d calculate your LVR:
Loan amount ($420,000) ÷ property value ($600,000) = 0.8
0.8 x 100 = 80% LVR
Which lenders offer 70% LVR home loans?
The vast majority of banks and non-bank lenders in Australia offer home loans to borrowers with an LVR of 70% or less.
Because these loans are often considered to be relatively low risk, you will likely have access to a lender's full suite of products and, potentially, some of their most competitive interest rates.
You can compare a wide range of 70% LVR options in the comparison table above.
