# Mortgage switching calculator

## How to calculate LVR for a refinance home loan

To calculate the Loan-to-Value Ratio (LVR) for a refinance home loan in Australia, you can follow these steps:

1. Determine the loan amount: This is the amount you are borrowing for the refinance.
2. Obtain a recent property valuation: You will need to know the current value of your property. This can be obtained through a professional valuation or by using the bank's valuation.
3. Divide the loan amount by the property valuation: Divide the loan amount by the property valuation to get the LVR as a decimal.
4. Multiply the result by 100: Multiply the decimal value by 100 to convert it into a percentage.

For example, let's say you are refinancing and borrowing \$400,000, and the recent property valuation is \$500,000. The calculation would be as follows:

LVR = (Loan amount / property valuation) x 100
LVR = (\$400,000 / \$500,000) x 100
LVR = 80%

So, in this example, the LVR for the refinance home loan would be 80%.

It's important to note that different lenders may have different maximum LVR limits, and a higher LVR may result in additional costs such as Lenders Mortgage Insurance (LMI).

## How to refinance a home loan

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## FAQs

### What is a refinance calculator?

A refinance calculator is a tool that helps you calculate how much you could save in repayments when you switch your home loan to a new lender.

### How does the calculator work?

The refinance calculator works by taking into account your current home loan details, such as the interest rate, loan term, and outstanding balance, and comparing them to the details of a new loan. It then calculates how much you could save in repayments by switching to the new loan.

### What information do I need to use a refinance calculator?

You will need to know your current home loan details, such as the interest rate, loan term, and outstanding balance, as well as the details of the new loan you are considering.

### Is the calculator accurate?

The refinance calculator can provide a good estimate of how much you could save by refinancing your home loan, but they may not take into account all the costs associated with refinancing, such as application fees and legal fees.

### Can I use the calculator for any type of home loan?

The calculator can be used for most types of home loans, including variable rate, fixed rate, and split rate loans.

### How much can I borrow if I refinance?

The amount you can borrow when you refinance depends on several factors, including your home's current value, how much you still owe on your mortgage, and the type of loan you are considering.

Lenders typically allow homeowners to borrow up to 80% of their home's value, but this can vary depending on your credit score and the type of property attached to the loan.

You'll also need to maintain at least 20% equity in your home after closing on the cash-out refinance, which limits how much you can borrow.

### Can you refinance less than 80%?

Yes, you can refinance for less than 80% of your home's value. The amount you can refinance for will depend on your specific circumstances, such as your credit score, the type of property attached to the loan, and the lender's requirements.

It's important to note that refinancing for less than 80% may not be the best option for everyone, as it may not provide enough funds to cover your needs.

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