Refinancing your home loan: Why LVR could be your best bargaining chip

By Jasmine Gearie · · 2 min read
Fact Checked
Advertiser disclosure
A young woman is using her laptop and smiling.

Your loan-to-value ratio (LVR) refers to the amount you need to borrow compared to the property’s value, expressed as a percentage.

As you pay down your home loan, your LVR is also likely to decrease, so another way to think of LVR is the percentage of property value that is owned by you (your home equity).

But why exactly can your loan-to-value ratio be such a powerful bargaining chip?

Well, because LVR is one of the metrics used by lenders to assess a borrower’s risk, the lower yours is, the ‘safer’ you’re considered as a borrower.

Therefore, lenders will likely offer their lowest rates to those with lower loan-to-value ratios – that is, those with higher deposits or home equity.

If you’ve been paying down your current home loan for a few years now and you’ve managed to lower your LVR, you could be in a position to score a better rate if you choose to refinance your mortgage.

Average variable rates based on LVR – Mozo database as at 11 April 2024

LVRAverage variable rate (p.a.)
Monthly repayments ($400k loan, P&I, 25 years)**
60%6.75% p.a
$2,764
70%6.79% p.a$2,774
80%6.84% p.a.$2,786
90%7.11% p.a.$2,855

Source: Mozo.com.au as at 11 April 2024, using average variable rates for owner occupier, principal & interest home loans at $400,000 across different LVR tiers.

Just how much could you save with a lower LVR? According to Mozo’s data, the average variable rate on offer with a 90% LVR is 7.11% p.a., while an LVR of 70% is 6.79% p.a. – that’s 32 basis points lower.

Depending on the size of your loan and the remaining term, a rate difference of 0.32% could potentially cut down your monthly repayments if you were to refinance.

For instance, on a $400,000 loan being paid off over 25 years, you could potentially save $81 in repayments each month, that’s close to $1,000 in one year.

This is why it’s so important to compare home loans – even after you already have one – to ensure you’re always getting a competitive rate.

The interest rates in the table and the scenario above are just averages, and there are plenty of lower rates available to mortgage holders with lower LVRs who are looking to switch their loans.

To give you a taste of the options out there, we’ve wrapped up a number of competitively priced loan deals for 90%, 80%, 70% and 60% LVRs below.

Refinancing home loans using LVR

90% loan-to-value ratio (10% deposit or equity)

Mozo may receive payment if you click to the website of one of the products below. Mozo does not compare the entire market.
Important disclosures and comparison rate warning*
Bendigo Bank Express Home Loan
  • 6.01% p.a. variable rate (6.14% p.a. comparison rate*)
  • Offset account and redraw facility
  • 2024 Mozo Experts Choice Low Cost Home Loan winner

  • $250 establishment fee paid at settlement
  • $10 monthly service fee

Bendigo Bank’s Express Home Loan is available on LVRs up to 90%, making it a compelling choice for anyone with at least 10% equity in their home (or a 10% deposit). Sweetening the deal is the ability to access an offset account and make free extra repayments, both of which could help savvy borrowers save even more on interest. Bendigo’s Express Home Loan is only available online and Bendigo says the approval process can be as little as 1 hour.

80% loan-to-value ratio (20% deposit or equity)

Mozo may receive payment if you click to the website of one of the products below. Mozo does not compare the entire market.
Important disclosures and comparison rate warning*
Unloan Variable Home Loan
  • 5.99% p.a. variable rate (5.90% p.a. comparison rate*)
  • Loyalty discount every year for up to 30 years
  • Mozo Experts Choice Low Cost Home Loan winner 2023 and 2024

  • No offset account

Built by CommBank, Unloan offers competitive variable rates from 5.99% p.a. (5.90% p.a. comparison rate*) to mortgage holders with an LVR of at least 80% – that’s a minimum of 20% equity in their home. Unloan’s rates were previously only available to refinancers when it first launched back in 2022, but the lender has now opened its books to new borrowers as of April 2024. Unloan is unique because it offers a 0.01% p.a. discount for each year you’re paying off your loan for up to 30 years (T&Cs apply).

70% loan-to-value ratio (30% deposit or equity)

Mozo may receive payment if you click to the website of one of the products below. Mozo does not compare the entire market.
Important disclosures and comparison rate warning*
Macquarie Basic Variable Home Loan
  • 6.15% p.a. variable rate (6.17% p.a. comparison rate*)
  • Make free extra repayments and access redraw facility
  • No upfront or ongoing fees

  • $400 discharge fee
  • Offset account not included

Those with an LVR below 70% – that is, at least 30% equity in their home or a 30% deposit – will be able to access Macquarie’s variable rate starting at 6.15% p.a. (6.17% p.a. comparison rate*). The Basic Home Loan allows you to make extra repayments at no cost, and you can redraw if you need to without facing a fee. An offset account isn’t included as standard, but you have the option to add one for an annual fee.

60% loan-to-value ratio (40% deposit or equity)

Mozo may receive payment if you click to the website of one of the products below. Mozo does not compare the entire market.
Important disclosures and comparison rate warning*
UBank Neat Home Loan
  • Variable rates from 6.14% p.a. (6.16% p.a. comparison rate*)
  • Extra repayments at no cost
  • No annual fees

  • $250 settlement fee
  • No offset account

UBank’s Neat Home Loan offers variable rates from 6.14% p.a. (6.16% p.a. comparison rate*) to borrowers with an LVR of 60% – at least 40% equity in their home. It’s light on fees, with zero annual fees and the ability to make extra repayments on your loan at no cost. UBank comes backed by NAB, so you can benefit from the savings an online lender can offer, and still get the peace of mind that comes with the backing of a big bank.

Interested in seeing how these offers compare to other home loans for refinancers? Start comparing more deals by heading over to the Mozo refinance home loan comparison hub.

Home loan comparisons on Mozo

Mozo may receive payment if you click the products below. We don’t compare the entire market, but you can compare more home loans here.
Last updated 27 July 2024 Important disclosures and comparison rate warning*

Promoted

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Basic Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.16 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.

  • Neat Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

  • Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.13 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Refinancers or first home buyers pay no monthly or annual fees. Up to $3,000 cashback when you complete your home loan application online. $2,000 cashback on loans ≥$250K; or $3,000 cashback on loans ≥$500K. LVR ≤80%. T&Cs and credit criteria apply.

  • Optimum Fixed Rate Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.69 % p.a.
    Fixed 3 years
    Comparison rate
    6.34 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    Lock in a competitive interest rate and enjoy peace of mind for the fixed period. Available for owner occupied new and refinanced home loans with at least 20% deposit. Split option available as well as offset and redraw. Noapplication, ongoing or banking fees. Third Party fees may be applicable - payable within loan repayments. Extra repayments up to $20K per annum permitted. Apply online, 100% member owned credit union.

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • OMG Home Loan

    • Owner Occupier
    • Principal & Interest
    • <60% LVR
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    6.02 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    BCU Bank’s OMG owner occupied home loan offers a variety of great low rates depending on your deposit. Save with no ongoing annual fees. Access your extra payments when you need to through the redraw facility. Pre-approval valid for 3 months.

  • Flex Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    5.99 % p.a.
    Fixed 3 years
    Comparison rate
    6.34 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Competitive Fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

  • Express Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <90%
    Interest rate
    6.01 % p.a.
    Variable
    Comparison rate
    6.14 % p.a.
    Initial monthly repayment
    $3,001
    Go to site

    Get online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

  • Neat Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

  • Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.13 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Refinancers or first home buyers pay no monthly or annual fees. Up to $3,000 cashback when you complete your home loan application online. $2,000 cashback on loans ≥$250K; or $3,000 cashback on loans ≥$500K. LVR ≤80%. T&Cs and credit criteria apply.

  • Basic Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.16 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.

  • Flex Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.38 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

  • Offset Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.39 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.

  • Basic Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR<70%
    Interest rate
    6.25 % p.a.
    Fixed 3 years
    Comparison rate
    6.20 % p.a.
    Initial monthly repayment
    $3,079
    Go to site

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $10,000,000.

  • Offset Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR <70%
    Interest rate
    6.25 % p.a.
    Fixed 3 years
    Comparison rate
    6.42 % p.a.
    Initial monthly repayment
    $3,079
    Go to site

  • Fixed Rate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    6.54 % p.a.
    Fixed 2 years
    Comparison rate
    7.10 % p.a.
    Initial monthly repayment
    $3,174

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

image of houses

Need help with refinancing?

You might have questions that need personal answers. We’ve teamed up with the mortgage brokers at Lendi to get you the answers you need, and a home loan deal you deserve.

Learn more

* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.

Compare home loans