LVR and interest rate relationships

[mgs4]

My understanding is when LVR kicks over 80% and LMI is required the interest rate typically goes up a bit? Then further if its fairly high LVR eg over 90%? Do you ever have an interest rate reduction when the credit risk becomes particularly low with low LVRs eg below 50%? Thanks.

 

[Rolf Latham]

My understanding is when LVR kicks over 80% and LMI is required the interest rate typically goes up a bit? Then further if its fairly high LVR eg over 90%? Do you ever have an interest rate reduction when the credit risk becomes particularly low with low LVRs eg below 50%? Thanks.

Some lenders price rate for risk above 80 and 90, many dont.

Some did provide minor rate redns at 75 %, but have largely chucked that idea out of late.

There will be some ad hoc pricing benefit for larger portfolios with Lvrs of 50 % or so.......... but for borrowers with that sort of profile, one would need to consider other things, especially leaving a lender with that sort of LVR if not required

ta
rolf

 

[Aaron_C]

About half half price more expensive for anything above 80% LVR straight off the bat. Many others do not - they base it solely on loan volume and some don't even have volume pricing at all.

However, if you are looking to negotiate pricing for any lender - LVR does play a key role. They are more likely to price a low LVR loan better than a high LVR one (at their discretion).