Refinance To A Better Rate Using Your LVR

Using your loan-to-value ratio to minimise your mortgage rate
Your loan-to-value (LVR) ratio can earn you a discounted rate, with many lenders offering tiered interest rates based on how much equity you have in your property.
Product Comparison

$950,000 Mortgage Over 30 Years

LVR PercentageInterest Rate Comparison RateMonthly RepaymentInterest ChargedTotal Repayments
Loan to Value ratio 70% or less2.19%2.20%$3,603$346,840$1,296,840
Loan to Value ratio of 70.01% to 80%2.29%2.30%$3,651$364,270$1,314,270
Loan to Value ratio of 80.01% or more2.99%3.00%$4,001$490,042$1,440,042
Loan To Value Ratio of 70% Or Less
Interest Rate2.19%
Comparison Rate2.20%
Monthly Repayment$3,603
Interest Charged$346,840
Total Repayments$1,296,840
Loan to Value Ratio Of 70.01% To 80%
Interest Rate2.29%
Comparison Rate2.30%
Monthly Repayment$3,651
Interest Charged$364,270
Total Repayments$1,314,270
Loan to Value ratio of 80.01% or more
Interest Rate2.99%
Comparison Rate3.00%
Monthly Repayment$4,001
Interest Charged$490,042
Total Repayments$1,440,042

A number of factors work together in determining your loan-to-value ratio. While your principal repayments (on Principal & Interest products) will continue to reduce your mortgage balance, additional repayments, market value fluctuations and property improvements will also effect the final percentage.

Lowering your LVR can bring significant savings on your monthly repayments and, in the long term, the amount of interest you pay on your loan. If you have additional funds, it may be worth making some lump some repayments on your mortgage to bump your LVR into a lower bracket and enjoy the savings it brings on your refinance. You might also like to consider other ways to maximise your refinance before you make an application:

What seem like minuscule shifts in percentages between lenders can end up a large sum in the long run – how much can 0.5% save you?

Balance the costs from your outgoing and incoming lenders, as well as government charges, against the potential savings.

Speed up your application by ensuring you have personal and financial documentation available for your new lender to assess.

While lenders can offer appealing advertised rates, you cannot underrate the importance of the comparison rate.

Be aware of the different sorts of refinance and what will help you achieve your goals and suit your financial situation.

There can be a lot to be across when refinancing. A credit advisor is your best resource to help you will all of these steps.