LVR, or Loan to Value Ratio, represents the amount of your property’s value that is covered by a mortgage, expressed as a percentage. It’s a key metric lenders use to assess risk when providing finance to potential buyers, and therefore impacts the pool of eligible purchasers for your property.
As of December 2025, a lower LVR generally means a larger deposit has been saved, which is viewed favourably by lenders. In Melbourne, particularly in the Eastern Suburbs where competition for family homes is strong, a buyer with a higher LVR (smaller deposit) may face stricter lending criteria. This can sometimes limit their borrowing capacity, potentially impacting the final sale price. Currently in Melbourne, we’re seeing many buyers aiming for an 80% LVR or lower to secure favourable loan terms. While a property’s appeal isn’t solely determined by LVR, understanding it helps explain why some buyers may be pre-approved for larger amounts than others. Fletchers’ experience across multiple generations shows that market conditions in 2026 will continue to favour well-presented properties appealing to a broad range of buyers, including those with varying LVRs. Preparing your property to maximise its appeal – through styling (typically $2,000-$8,000) and professional photography ($500-$1,500) – can broaden the buyer base.
Ultimately, LVR is a factor influencing buyer demand and lending capacity, and understanding its role provides valuable context when selling your property in Victoria.