Define LMI and LVR

Question

Define LMI and LVR

Accepted Answer

LMI stands for Lenders Mortgage Insurance, which protects the lender in case the borrower defaults on the loan. LVR stands for Loan to Value Ratio, which is the ratio of the loan amount to the value of the property.

LMI is an insurance policy that protects the lender in case the borrower defaults on the loan.
LMI is usually required when the borrower has a deposit of less than 20% of the property value.
LVR is the ratio of the loan amount to the value of the property, expressed as a percentage.
LVR is used by lenders to assess the risk of the loan, with lower LVRs indicating lower risk.
For example, if a property is valued at $500,000 and the borrower takes out a loan of $400,000, the LVR would be 80%.

Define LMI and LVR

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