For mortgage and finance brokers · Video · 2:23

A genuine LVR, and why the value behind it matters

2:23 · Posted 30 October 2025 on the HomeSec YouTube channel

Paul Stone for brokers on the gap between an advertised LVR and a genuine one: the percentage applied to today's market value, appraised in-house with local agents, and the client with stacked daily repayments it suits.

In short

An LVR is a percentage of a value, so the value decides the loan. Paul's complaint is with lenders who advertise a high LVR and then mark the property down.
HomeSec does not use valuers. The figure is today's market value, appraised in-house with input from agents who sell in that area.
Up to 80% on residential and 70% on commercial property, counting what is already owed; lower on large acreage and on properties worth less than $800,000.
The client Paul ends on: several daily-repayment cash flow loans, paid out by one loan with nothing to pay for up to six months.

What Paul says

Paul opens with a line for brokers: HomeSec writes first and second mortgages to 80%, and he means a genuine 80%. His target is what he calls the bogus version, where a lender advertises the same percentage and then marks the property's value down, so the loan the client actually receives is far smaller than the advert implied. HomeSec does not use valuers. Paul's view is that valuers working on private mortgages protect themselves first, and the cautious figure that results is no help to the broker or the client. HomeSec appraises in-house instead, talking to local real estate agents in its national network to get today's market value, and to get it quickly. He closes on the client he sees most: a business juggling several cash flow loans with daily repayments.

Why the value matters more than the percentage

Take an illustrative residential property that would sell today for $1,000,000, with $500,000 owing on the first mortgage. At 80% of market value, total borrowing can reach $800,000, leaving $300,000 available behind the existing loan. Now suppose a valuation comes back at $875,000. The advertised percentage has not moved, but 80% of the lower figure is $700,000, which is only 70% of what the property is worth, and the amount available falls to $200,000. Because the existing debt does not shrink with the valuation, a modest markdown takes 33% of the client's borrowing with it. That is the gap Paul is describing, and it is why the value basis deserves a question before the percentage does. The guide to what LVR means and how it is worked out has more worked examples, including the limits for commercial property, acreage and vacant land.

How HomeSec arrives at today's market value, and why it never uses a forced-sale figure, is covered in Paul's video on how HomeSec values property without a valuer.

The client with stacked daily repayments

The second half of the video is about who this suits. Paul names clients with cash flow problems, damaged credit or an urgent need for capital, and then a pattern every broker will recognise: several cash flow loans, most of them behind, each taking a repayment out of the account every day. One property-secured loan can pay them all out at settlement. With interest capitalised for up to six months, the client goes from several debits a day to none, while the interest accrues and is added to the loan. There are no daily or weekly debits afterwards either; the term is open and the loan can be repaid early at any time. The video on consolidating stacked business loans walks through that pattern, and the guide to loan stacking explains how those loans rank against each other.

What to send

The scenario itself: the property, what is owed on it and to whom, the amount, the purpose and the exit. A Lending Manager gives an indicative answer on that call. For conditional approval the list is short: photo ID, a council rates notice and the most recent mortgage statement. The full broker terms, including how brokerage is paid, are on the broker page.

Limits as HomeSec publishes them today: up to 80% on residential and 70% on commercial property, lower on large acreage and on properties worth less than $800,000. Every loan is subject to assessment and approval.

What the video means, in our published terms

Funding time. Funds can be released in as little as 24 hours from a clean, complete scenario. Timing depends on the file, the title and settlement requirements, and is not guaranteed.
Six months. Interest can be capitalised for up to 6 months, so there are no scheduled repayments in that period. Interest is not waived: it accrues and is added to the loan.
Extensions. An extension is assessed and agreed in writing before it applies. There is no fee to extend.
Approval. Every loan is subject to assessment and approval, real estate security, fees and an acceptable repayment or exit strategy. Owning property does not by itself mean your client's loan will be approved.
Purpose and size. $20,000 to $5,000,000, for business and investment purposes only. Credit provided for those purposes is not regulated under the National Consumer Credit Protection Act 2009 (the NCCP Act), and the protections available to consumer borrowers do not apply.

Questions people ask next

Does the LVR limit include the client's existing first mortgage?

Yes. For a second mortgage the limit covers everything secured on the property: the first mortgage plus the new loan. On a residential property worth $1,000,000 with $500,000 owing, a limit of 80% allows $800,000 in total, so up to $300,000 can sit behind the first mortgage.

Is a lower LVR on commercial property the same as a marked-down valuation?

No. A lower limit is published policy and you can see it before you send the file: HomeSec lends up to 70% on commercial property because it has fewer buyers and its value leans on a lease and a tenant. A marked-down valuation keeps the advertised percentage but applies it to a figure below what the property would sell for, and the broker often finds out only when the report comes back.

What should a broker ask a lender before relying on its advertised LVR?

Three things. What value the percentage is applied to: a sworn valuation, a forced-sale figure or today's market value. Who orders that value and how long it takes. And whether the limit changes for commercial property, acreage or a small regional town. Then ask for an indicative dollar figure on the actual address, because that number, not the percentage, is what your client can use.

The full guide

The video is the short version. The written guide has the detail: what LVR means and how it is worked out.

To talk it through about your own property, ring a Lending Manager on 1300 93 83 87, Mon–Fri, 8:30am – 5:30pm Melbourne time.