Does the Loan to Value Ratio, (LVR) differ depending on zoning and location?
Yes, the LVR will vary depending on the property’s zoning and its location. Generally though, LVR’s in capital cities have higher leveraging than regional or country areas. Residential properties generally have higher LVR’s to commercially zoned properties. The loan amount itself will also affect the LVR due to risk factors. For example, whilst some LVR’s can be as high as 85% of purchase price for commercial sites; the LVR will most likely decrease as the loan amount becomes larger.You will also need to consider that with higher LVR’s, the structure of the loan may need to be Principal & Interest rather than Interest Only and this may or may not suit your particular needs. There are specific limits or restrictions on rural land and specialized properties. Discuss your particular scenario with us to ensure you achieve the LVR which best suits your needs.
