What is a Loan to Value Ratio (LVR) and how does this affect me?

Last Updated: 21 Dec 2015

Loan to Value Ratio (LVR) is the amount of your loan as a percentage of the value of the property you are buying. For example, if you want to buy a property worth $500,000 and you have a deposit of $100,000, then you are borrowing $400,000 against a $500,000 property. Your LVR would be 80%.

The Reserve Bank of New Zealand (RBNZ) has placed restrictions on banks on the amount of high LVR lending they can do. The amount banks are allowed to lend varies depending on the location of the property and its intended purpose. However, the RBNZ have exempted certain types of lending from their restrictions, so it pays to talk to one of our Lending Specialists about your options if you have a small deposit. Simply call 0800 100 600 or visit your nearest ASB branch.

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