Time to
Renegotiate or Refinance?
How Your LVR Might Unlock a Better Rate
Over the last 12 months, Australian
property prices have risen across many areas. While rising prices can make
it harder for new buyers, existing homeowners may be sitting on a hidden
advantage.
If your home has increased in value and you’ve
been paying down your loan, your Loan to Value Ratio (LVR) may have
dropped. When your LVR drops, your risk to the bank reduces – and that often
means you’re eligible for a lower interest rate.
That’s why now may be the right time to renegotiate
with your current bank or refinance to a better deal.
The 4 C’s
of Credit – Why LVR Matters
At Awesome Lending Solutions, we often talk
about the 4 C’s of Credit. These are the four key factors lenders use to
assess your risk and decide:
- whether they will lend to you, and
- what interest rate they’re prepared to offer
The stronger your overall credit profile, the
better the rate you can usually negotiate. LVR is one of the biggest drivers
of loan pricing.
What Is
Loan to Value Ratio (LVR)?
Loan to Value Ratio (LVR) is simply the percentage of a property’s value that you’ve borrowed.
It’s calculated by dividing your current loan
balance by your property’s value.
For example:
- A $600,000 loan on a $800,000 home = 75% LVR
As your loan balance falls and your property
value rises, your LVR reduces.
Why a Lower
LVR Reduces Your Interest Rate
The lower your LVR, the lower the risk to the
lender.
Think of it this way:
- At 95% LVR, the bank has only a 5% buffer if they ever had
to sell the property.
- At 60% LVR, the bank has a 40% buffer.
That’s a massive reduction in risk, and
lenders price loans accordingly.
As a real-world example, some lenders have more
than a 1.00% difference between their highest and lowest interest rates
purely based on LVR bands.
How Awesome
Lending Solutions Helps
Free Property Reports
We provide complimentary property value reports so we can accurately calculate
your current LVR.
We negotiate with your bank for you
For existing Awesome Lending clients, we use a specialist monitoring service
that reviews your loan every six months and compares it to your lender’s best
advertised rate.
For new clients, we manually approach your
lender with:
- updated property value
- current loan balance
- their own best advertised rates
You don’t need to make the call – we handle it
for you.
We compare the pair
If your current lender won’t move, we compare products from over 40 home
loan lenders to see whether refinancing could leave you better off.
And It
Costs You Nothing
Our service is 100% free. We don’t
charge you to renegotiate, review, or refinance your loan.
We’re here to help you pay less interest,
build wealth faster, and make sure your loan keeps up with your life.
If you’re wondering whether your LVR qualifies
you for a better rate, let’s check it.
Albert Waldron
Finance Strategist & Director
Awesome Lending Solutions
📞 0420 977 960 | ☎️ 02 7904 9560