Tag Archives: Loan-to-value ratio

Auckland Property Investment – High Density Living

Many property investors have shied away from apartments as an option for property investment nz, partly the reason for this may be historic perceptions. Banks and financial institutions have treated apartments as a higher risk and would not lend as much to investors, this is called the LVR (loan to value ratio).

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What is Loan-to-Value Ratio

Loan-to-value ratio is simply the comparison of the size of the loan taken to buy a property, with the value of the property. It is a risk assessment ratio for lenders. Also called the LTV ratio or LVR, it is one of the most significant indicators of the risk involved in a mortgage loan. This ratio is the first to be assessed by a lender before agreeing to clear a loan for a borrower. It is the calculated amount of the loan taken as a percentage of the total appraised property value.

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