What LTV can I borrow against my property?

The short answer: most asset-secured business facilities reach up to 65–75% of a property’s value, depending on the loan type, the asset and where the facility sits behind any existing mortgage. The number that governs it isn’t the new advance on its own — it’s the combined debt against the property, all subject to assessment.

What LTV (or LVR) actually means

LTV — loan-to-value — is the loan amount divided by the property’s value, expressed as a percentage. In Australia the same measure is usually called LVR, the loan-to-value ratio; the two terms are interchangeable. A $700,000 loan against a $1,000,000 property is a 70% LVR.

It’s the single biggest factor in what you can raise against an asset, because it sets the cushion between the debt and what the property would realise if it ever had to be sold. The lower the LVR, the more room there is — and the wider the terms available.

It’s the combined LVR that counts

When you borrow behind a mortgage you already hold, the figure that matters is the combined LVR — your existing debt plus the new advance, measured together against the property’s value. A second mortgage or a caveat sits behind your current first mortgage, so what you can raise is whatever headroom is left up to the combined ceiling.

That’s why two borrowers with the same property can raise very different amounts: the one with a smaller existing mortgage has more equity free to draw on. Releasing equity is, in practice, drawing into the gap between your current debt and the combined LVR limit.

Indicative LVR limits by loan type

These are representative ceilings for business-purpose, property-secured facilities — a current guide, not a locked rate card, and always subject to assessment of the asset, the security position and the exit.

Stronger, more marketable security and a clear exit support the upper end of each range; specialised assets, vacant land or a weaker exit pull it down.

What moves your LVR up or down

A handful of things decide where in the range you land:

• Asset type. Standard commercial or residential property in a metro market supports a higher LVR than vacant land, rural or specialised security.
• Security position. A first mortgage carries less risk than a second or a caveat, so first-ranking security generally reaches a touch higher on its own — while second-ranking is always measured on the combined position.
• The exit. A defined, credible repayment or refinance plan is what underwrites the higher end of the range. No realistic exit means a lower LVR — or no facility at all.
• Location and marketability. How quickly the asset could be sold if it ever needed to be feeds directly into the cushion required.

Working out what you can raise

The arithmetic is simple enough to run yourself before you enquire:

1. Take a realistic value for the property — a current valuation, or a defensible estimate of market value.
2. Apply the combined LVR ceiling for the loan type you’d use — for example, ~75% for a second mortgage.
3. Multiply the value by that ceiling to get the maximum total debt the property supports.
4. Subtract any existing mortgage still owing.
5. What’s left is the indicative amount available to draw — subject to assessment.

A worked example

Take a commercial property valued at $2,000,000 with an existing first mortgage of $900,000 — a 45% LVR today.

A second mortgage to a 75% combined LVR allows total debt of $1,500,000 against the property. Subtract the $900,000 already owing, and that leaves up to $600,000 available to draw — without refinancing or disturbing the first facility.

Change the inputs and the answer moves: a larger existing mortgage leaves less headroom, and a more specialised asset lowers the ceiling. The principle holds either way — find the combined LVR limit, subtract what’s already secured, and the difference is what’s on the table, subject to assessment.