In the competitive world of home loans, your Loan-to-Value Ratio (LVR) is more than just a number – it's a key to potentially better refinancing deals.
Let's break this down in a way that makes sense to everyone.
The Loan-to-Value Ratio (LVR) is a straightforward concept: it's the comparison of your loan amount to the value of your property, expressed as a percentage.
Think of it as a balance scale, where one side holds the value of your home and the other the amount you owe on your mortgage.
Lenders value lower risk.
A lower LVR indicates that you own more of your property compared to what you owe. In the viewpoint of the lender, this makes you a safer bet, like a player with a powerful hand in a card game. The more solid you appear, the more likely lenders will grant you favourable refinancing terms.
Imagine you've been chipping away at your mortgage, reducing your LVR - this diligence can pay off when refinancing.
For example, data suggests that moving from a 90% LVR to a 70% LVR could shave 0.35% off your rate.
On a $400,000 loan over 25 years, it translates to saving around $26,000 over the life of a loan.
With lower LVRs, the refinancing market becomes your oyster.
You'll find a variety of competitive rates for different LVR levels (like 60%, 70%, and 80%), opening doors to deals that can significantly reduce your monthly repayments.
That’s where Craggle can support you refinance with the market offers or renegotiate with your current lender to secure the best possible deal.
Lowering your LVR not only gives you a sense of progress in your home loan journey but also positions you favourably for refinancing.
With a lower LVR, you’re more likely to access lower interest rates, leading to substantial savings over time.
It's a powerful reminder of the value of reducing your home loan balance and the opportunities it unlocks in the refinancing market.
Disclaimer: This is not financial advice and is for educational purposes only.
The Craggle Team