Lenders use the LVR to assess your home loan application as it indicates the likelihood that they will lose money in the event that you cant repay your loan. Say youre buying a 300000 home and taking out a 250000 loan. It also generates a normal curve and shades in the area that represents the p-value.
To calculate the LTV start with either the selling price or the appraised value of the property.
Now that you know how to calculate your loan-to-value and combined loan-to-value ratios and how you can impact them you can make more informed choices to help you reach your financial goals whether you choose to borrow from the equity in your home refinance or simply continue to pay down any current home loan balances. Calculating your vehicles LTV is pretty simple. And with a longer term youll end up paying more in interest over the life of the loan. To calculate your LTV divide 250000 by 300000.