How it is calculated
If a loan of $300,000 is secured against a property assessed at $1,000,000, the LVR is 30 per cent. Where other debt ranks ahead, the relevant measure for a lender is the combined position, not their loan alone.
Why the headroom matters
The gap between the debt and the value is the buffer available to absorb a fall in value and the costs of recovery. A tighter buffer leaves less room for either.
What it does not tell you
LVR says nothing about whether the borrower can service the loan, how quickly the property could be sold, or what it would realise under pressure. Where an LVR is shown on a LendCap opportunity, it is one approved data point among the full offer information.
