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Our institutional holdings in major Australian bank deposits drive higher returns with excellent liquidity, while our portfolio of secured loans backed by Australian property enables us to generate additional yield whilst maintaining a low level of risk.

• Maintaining a low average loan valuation ratio gives us very strong security coverage against loans.
• Shorter average loan tenor means we are less exposed to property market volatility.
• Funding many small secured loans compared fewer larger loans adds less single loan exposure and more diversification.

What is a loan to valuation ratio?

The loan to valuation ratio (LTV) is a percentage that represents the amount of borrowing against an asset, compared to the asset's value. It’s a key metric to assess risk and determine loan terms. A lower LVR generally means less risk for the lender.

For example, standard home loans see a borrower put up a 20% deposit, and borrow the remaining 80% against the value of a property. This would mean an LVR of 80%.

At Earnr, our average LVR is currently 52%.

What is the average loan tenor?

The loan tenor is defined as the time left in a loan for it to be fully paid off. A longer average loan tenor generally indicates a higher risk profile for lenders due to increased exposure to different factors over time.

The average length of a home loan in Australia is 25 years. At Earnr our average loan tenor is currently 11.3 months.

What does loan diversification mean?

Loan diversification operates on the principal of spreading any risk across multiple investments. For Earnr this means spreading our loans across different borrower types, industries, geographic regions and risk profiles.

By lending to a variety of borrowers, a lender reduces the risk that a single economic effect will impact the entire portfolio’s performance. We focus on lots of small loans, across many different regions and areas.