Glossary
Combined LVR
Also called: total LVR, aggregate LVR
Combined LVR adds every loan secured on a property, such as a first mortgage and a second mortgage or caveat loan, and compares the total with the property's value. It shows the total debt load on the security rather than the share taken by one lender.
An example
A business owner already has a bank first mortgage and asks a private lender for a second mortgage. The second lender adds both balances together, divides by the valuation and uses the result to decide whether there is enough equity left to support its loan behind the bank.
Why it matters
A second-ranking lender is repaid only after the first mortgagee, so it cares about the combined figure, not just its own loan. A high combined LVR leaves little room for selling costs, interest that keeps accruing or a fall in value, which can affect whether a loan is offered and on what terms.
Points to check
When adding a second loan behind an existing mortgage, ask your first lender whether its documents allow further security and whether it needs to consent. Use the current balance of every loan, not the original amount, and include any redraw or undrawn limit the first lender could advance ahead of the second. Check whether capitalised interest on either loan will push the combined figure higher over the term.
Try it: LVR and loan-to-cost calculator