Whether you’re buying an investment property or your first home, there are a few things a borrower can do to make themselves appear more reliable to a lender in Australia. One of the most recommended tips you may come across is to save a 20 per cent deposit or have an “80 per cent LVR home loan”

Let’s explore just what an 80 per cent LVR home loan is, its benefits and disadvantages, and how you can use this to potentially negotiate a lower interest rate.

Find and compare 80% LVR home loans

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Advertised Rate

2.55%

Fixed - 1 year

Comparison Rate*

3.21%

Company
Adelaide Bank
Repayment

$638

monthly

Features
Redraw facility
Offset Account
Borrow up to 79.9999%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.48

/ 5
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Advertised Rate

2.84%

Variable

Comparison Rate*

2.46%

Company
Athena Home Loans
Repayment

$710

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.96

/ 5
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More details
Advertised Rate

2.94%

Variable

Comparison Rate*

3.34%

Company
Newcastle Permanent
Repayment

$1,413

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.57

/ 5
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More details
Advertised Rate

2.84%

Variable

Comparison Rate*

2.68%

Company
Athena Home Loans
Repayment

$710

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.96

/ 5
Go to site
More details
Advertised Rate

2.74%

Variable

Comparison Rate*

2.74%

Company
UBank
Repayment

$1,382

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.76

/ 5
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Winner of Best investment home loan, RateCity Gold Awards 2021

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Advertised Rate

2.68%

Variable

Comparison Rate*

2.73%

Company
Heritage Bank
Repayment

$1,373

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

3.14

/ 5
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Advertised Rate

3.39%

Variable

Comparison Rate*

3.59%

Company
Pepper
Repayment

$1,484

monthly

Features
Redraw facility
Offset Account
Borrow up to 85%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.03

/ 5
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Advertised Rate

2.55%

Variable

Comparison Rate*

2.60%

Company
CUA
Repayment

$1,353

monthly

Features
Redraw facility
Offset Account
Borrow up to 90%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

3.10

/ 5
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Advertised Rate

2.29%

Variable

Comparison Rate*

2.23%

Company
Athena Home Loans
Repayment

$1,314

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

3.63

/ 5
Go to site
More details
Advertised Rate

2.59%

Variable

Comparison Rate*

2.60%

Company
Greater Bank
Repayment

$1,359

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

3.23

/ 5
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More details
Advertised Rate

2.69%

Variable

Comparison Rate*

2.69%

Company
NAB
Repayment

$1,375

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.96

/ 5
Go to site
More details
Advertised Rate

1.89%

Fixed - 1 year

Comparison Rate*

3.51%

Company
Greater Bank
Repayment

$1,256

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.76

/ 5
Go to site
More details

Learn more about home loans

What is an 80% LVR home loan?

An LVR is a financial term you may come across in your home loan journey. The LVR, or loan-to-value ratio, of your home loan equates to how much money you’re borrowing (loan amount) versus the value of the property being purchased.

Lenders use this measuring tool to assess your riskiness as a borrower and it can determine your interest rate. In theory, the larger a deposit, the better your financial discipline and ability to potentially meet mortgage repayments.

For example, on a $500,000 property, if you saved $100,000 this would add up to a 20 per cent deposit. This means that you would therefore be borrowing the remaining 80 per cent of the property’s value as a loan from a lender. The loan-to-value ratio is 80 per cent.

What are the benefits of an 80% LVR home loan?

There are a range of benefits to taking out an 80 per cent LVR home loan. In fact, it’s generally recommended to aim for a deposit minimum of 20 per cent due to the raft of benefits, including:

  1. Avoiding LMI. Lenders mortgage insurance (LMI) is a pesky insurance you’ll need to pay if you have an LVR under 80 per cent. As mentioned above, there is higher risk to a lender by lending money to borrowers with smaller deposits than 20 per cent. This insurance helps to protect the lender in the event you default on the loan. It can cost tens of thousands of dollars, and an 80 per cent LVR is a helpful way to avoid this cost.
  2. Less debt. Another benefit to consider is that the larger your deposit, the less debt you’re taking on by having a smaller home loan. This will not only mean smaller ongoing mortgage repayments, but less interest charged over the life of the loan.
  3. Lower rates. Some lenders reward reliable borrowers with LVRs of 80 per cent by offering them more competitive interest rates. The lower your interest rate, the lower your mortgage repayments, which means good news for your budget. In fact, if you have a high LVR you may be offered a higher interest rate. 
  4. Higher chance of approval. When applying for a home loan, you'll find that lenders have their own lending criteria. Most lenders will look at your bank account for proof that you are regularly saving and therefore more financially stable and eligible for a loan. If you have a 20 per cent or higher deposit, this may present you in a more favourable light to the lender, potentially increasing your chance of approval.
  5. More loan options. Some lenders limit borrowers’ access to certain, more competitive, home loan products if they have smaller deposits. By searching for an 80 per cent LVR home loan you may have success to a greater variety of loan options with reduced fees, helpful features or credit card packages.

What if I don’t have a 20 per cent deposit?

Saving up a 20 per cent deposit is no easy feat, especially if you’re looking to purchase property in Sydney or Melbourne where median prices are sky high. There are a few things home buyers can do now to try and bolster their home loan applications and potentially reach an LVR of 80 per cent with a larger deposit.

  • Get a guarantor. If you’re not financially able to save up a 20 per cent deposit yourself, you may consider bringing on a guarantor. This involves having someone else (typically family) come on to your home loan and offer up security (typically home equity) to bolster your application. The guarantor may take financial responsibility if you were unable to meet mortgage repayments. It does not necessarily mean a guarantor covers the whole loan amount. In fact, you can bring a guarantor on to cover the gap in your deposit so you can aim for an 80 per cent LVR. It also means less risk to the lender that you may default on the loan.
  • Boost your credit score. Your credit history is a key factor that determines not only whether you get a competitive interest rate from a lender, but whether you’ll be approved for a loan. If your credit score is not ideal, consider working on increasing it before you apply for your home loan.
  • Move back home. Moving back home with family can be a very simple way to save more money. Rent is arguably the biggest ongoing bill you have and can often be more expensive than mortgage repayments. If you’re aiming for a 20 per cent deposit but still falling short, swallow your pride and head home for a little while to increase your savings.
  • Downgrade or sell your car. A car is another costly expense that can significantly chip away at your budget when saving for a home. If you’re in a suburb with great access to public transport or ride sharing apps, consider selling your car for some extra cash. If this is not possible, you may want to consider downgrading to a more affordable model, just until your loan is approved.

What type of property can I purchase with an 80% LVR home loan?

The good news about 80 per cent LVRs is that you’re opening yourself up to a wider range of home loan options than if you saved a smaller deposit.

80 per cent LVR home loans are typically available to owner-occupiers and investors, whether shopping around for existing dwellings, land packages or new home builds. It will also afford you access to both fixed rate home loans and variable rate home loans. You may also gain access to loans with handy features, like an offset account, redraw facility or the ability to make extra repayments.

All that matters is the valuation of the property is within a range that your deposit does not fall below 80 per cent. Be careful in the real estate search and try to stay within a healthy property price range. This may mean not aiming for your dream postcode right away and looking in similar suburbs nearby – especially for first home buyers.

Also, try to keep up to date with the housing market, so you can watch for potential market value fluctuations. If there is a dip, that may be a more ideal time to buy property. But you may want to avoid buying in an area that will continue to lose property value, so be careful.

How do I find 80% LVR home loans?

  • Comparison tables. This comparison tool allows you to search for and filter down 80 per cent LVR home loans. You can enter the amount you want to borrow and property value to view loans within your LVR range. Then you can filter down and compare options side by side, to find a loan with an interest rate, fees and features that suit your financial needs.
  • Calculators. Not sure which home loan to choose? A home loan calculator may be able to help. Narrow down your short list with a mortgage repayment calculator to see how your loan options and their potential repayment amounts stack up against your budget. You can even calculate how much you may be able to borrow to get a better idea of your LVR before you begin your mortgage search.
  • Mortgage broker. Not sure if you’ll qualify for a 80% LVR home loan? It may be worth consulting with a mortgage broker. Mortgage brokers are considered experts in their field and may be able to offer advice and assistance in being approved for a home loan.

Frequently asked questions

Savings over

Select a number of years to see how much money you can save with different home loans over time.

e.g. To see how much you could save in two years by switching mortgages,  set the slider to 2.

How can I get ANZ home loan pre-approval?

Shopping for a new home is an exciting experience and getting a pre-approval on the loan may give you the peace of mind that you are looking at properties within your budget. 

At the time of applying for the ANZ Bank home loan pre-approval, you will be required to provide proof of employment and income, along with records of your savings and debts.

An ANZ home loan pre-approval time frame is usually up to three months. However, being pre-approved doesn’t necessarily mean you will get your home loan. Other factors could lead to your home loan application being rejected, even with a prior pre-approval. Some factors include the property evaluation not meeting the bank’s criteria or a change in your financial circumstances.

You can make an application for ANZ home loan pre-approval online or call on 1800100641 Mon-Fri 8.00 am to 8.00 pm (AEST).

Monthly Repayment

Your current monthly home loan repayment. To accurately calculate how much you could save, an accurate payment figure is required. If you are not certain, check your bank statement.

Remaining loan term

The length of time it will take to pay off your current home loan, based on the currently-entered mortgage balance, monthly repayment and interest rate.

Mortgage Balance

The amount you currently owe your mortgage lender. If you are not sure, enter your best estimate.

Interest Rate

Your current home loan interest rate. To accurately calculate how much you could save, an accurate interest figure is required. If you are not certain, check your bank statement or log into your mortgage account.

How personalised is my rating?

Real Time Ratings produces instant scores for loan products and updates them based what you tell us about what you’re looking for in a loan. In that sense, we believe the ratings are as close as you get to personalised; the more you tell us, the more we customise to ratings to your needs. Some borrowers value flexibility, while others want the lowest cost loan. Your preferences will be reflected in the rating. 

We also take a shorter term, more realistic view of how long borrowers hold onto their loan, which gives you a better idea about the true borrowing costs. We take your loan details and calculate how much each of the relevent loans would cost you on average each month over the next five years. We assess the overall flexibility of each loan and give you an easy indication of which ones are likely to adjust to your needs over time. 

Do other comparison sites offer the same service?

Real Time RatingsTM is the only online system that ranks the home loan market based on your personal borrowing preferences. Until now, home loans have been rated based on outdated data. Our system is unique because it reacts to changes as soon as we update our database.

How does Real Time Ratings work?

Real Time RatingsTM looks at your individual home loan requirements and uses this information to rank every applicable home loan in our database out of five.

This score is based on two main factors – cost and flexibility.

Cost is calculated by looking at the interest rates and fees over the first five years of the loan.

Flexibility is based on whether a loan offers features such as an offset account, redraw facility and extra repayments.

Real Time RatingsTM also includes the following assumptions:

  • Costs are calculated on the current variable rate however they could change in the future.
  • Loans are assumed to be principal and interest
  • Fixed-rate loans with terms greater than five years are still assessed on a five-year basis, so 10-year fixed loans are assessed as being only five years’ long.
  • Break costs are not included.

What fees are there when buying a house?

Buying a home comes with ‘hidden fees’ that should be factored in when considering how much the total cost of your new home will be. These can include stamp duty, title registration costs, building inspection fees, loan establishment fee, lenders mortgage insurance (LMI), legal fees and bank valuation costs.

Tip: you can calculate your stamp duty costs as well as LMI in Rate City mortgage repayments calculator

Some of these fees can be taken out of the mix, such as LMI, if you have a big enough deposit or by asking your lender to waive establishment fees for your loan. Even so, fees can run into the thousands of dollars on top of the purchase price.

Keep this in mind when deciding if you are ready to make the move in to the property market.

What is the flexibility score?

Today’s home loans often try to lure borrowers with a range of flexible features, including offset accounts, redraw facilities, repayment frequency options, repayment holidays, split loan options and portability. Real Time Ratings™ weights each of these features based on popularity and gives loans a ‘flexibility score’ based on how much they cater to borrowers’ needs over time. The aim is to give a higher score to loans which give borrowers more features and options.

How can I avoid mortgage insurance?

Lenders mortgage insurance (LMI) can be avoided by having a substantial deposit saved up before you apply for a loan, usually around 20 per cent or more (or a LVR of 80 per cent or less). This amount needs to be considered genuine savings by your lender so it has to have been in your account for three months rather than a lump sum that has just been deposited.

Some lenders may even require a six months saving history so the best way to ensure you don’t end up paying LMI is to plan ahead for your home loan and save regularly.

Tip: You can use RateCity mortgage repayment calculator to calculate your LMI based on your borrowing profile

What is upfront fee?

An ‘upfront’ or ‘application’ fee is a one-off expense you are charged by your bank when you take out a loan. The average start-up fee is around $600 however there are over 1,000 loans on the market with none at all. If the loan you want does include an application fee, try and negotiate to have it waived. You’ll be surprised what your bank agrees to when they want your business.

What is a cooling-off period?

Once a home loan’s contracts are exchanged between the borrower and the lender, a five-day cooling-off period follows, during which the contracts may be cancelled if needed.

What is a standard variable rate (SVR)?

The standard variable rate (SVR) is the interest rate a lender applies to their standard home loan. It is a variable interest rate which is normally used as a benchmark from which they price their other variable rate home loan products.

A standard variable rate home loan typically includes most, if not all the features the lender has on offer, such as an offset account, but it often comes with a higher interest rate attached than their most ‘basic’ product on offer (usually referred to as their basic variable rate mortgage).

What is appraised value?

An estimation of a property’s value before beginning the mortgage approval process. An appraiser (or valuer) is an expert who estimates the value of a property. The lender generally selects the appraiser or valuer before sanctioning the loan.

How much is the first home buyer's grant?

The first home buyer grant amount will vary depending on what state you’re in and the value of the property that you are purchasing. In general, they start around $10,000 but it is advisable to check your eligibility for the grant as well as how much you are entitled to with your state or territory’s revenue office.

How can I get a home loan with bad credit?

If you want to get a home loan with bad credit, you need to convince a lender that your problems are behind you and that you will, indeed, be able to repay a mortgage.

One step you might want to take is to visit a mortgage broker who specialises in bad credit home loans (also known as ‘non-conforming home loans’ or ‘sub-prime home loans’). An experienced broker will know which lenders to approach, and how to plead your case with each of them.

Two points to bear in mind are:

  • Many home loan lenders don’t provide bad credit mortgages
  • Each lender has its own policies, and therefore favours different things

If you’d prefer to directly approach the lender yourself, you’re more likely to find success with smaller non-bank lenders that specialise in bad credit home loans (as opposed to bigger banks that prefer ‘vanilla’ mortgages). That’s because these smaller lenders are more likely to treat you as a unique individual rather than judge you according to a one-size-fits-all policy.

Lenders try to minimise their risk, so if you want to get a home loan with bad credit, you need to do everything you can to convince lenders that you’re safer than your credit history might suggest. If possible, provide paperwork that shows:

  • You have a secure job
  • You have a steady income
  • You’ve been reducing your debts
  • You’ve been increasing your savings

How can I calculate interest on my home loan?

You can calculate the total interest you will pay over the life of your loan by using a mortgage calculator. The calculator will estimate your repayments based on the amount you want to borrow, the interest rate, the length of your loan, whether you are an owner-occupier or an investor and whether you plan to pay ‘principal and interest’ or ‘interest-only’.

If you are buying a new home, the calculator will also help you work out how much you’ll need to pay in stamp duty and other related costs.

What is stamp duty?

Stamp duty is the tax that must be paid when purchasing a property in Australia.

It is calculated by the state government based on the selling price of the property. These charges may differ for first homebuyers. You can calculate the stamp duty for your property using our stamp duty calculator.