Calculator
Home Equity
See how much equity you've built and how much is usable to fund your next move.
Usable equity
$340,000
Up to 80% LVR before LMI
Total equity
$530,000
Value less loan balance
Current LVR
44.2%
Loan / property value
Max loan at LVR cap
$760,000
Total facility against this property
Buying power (next purchase)
$1,307,692
Using 20% deposit + ~6% acquisition costs
General information only. Calculations are indicative, based on simplified rules current at FY2024–25, and exclude items such as foreign buyer surcharges, off-the-plan concessions, principal-place-of-residence rules and lender policy variation. Always verify with your accountant, broker and the relevant State Revenue Office calculator before transacting.
About this calculator
Home Equity Calculator (Australia)
Equity is the financial fuel for almost every second-property purchase in Australia. The difference between total equity (property value minus loan balance) and usable equity (the amount a lender will actually release without triggering LMI) is where most investors get tripped up. This calculator returns both numbers using the 80% Loan-to-Value Ratio (LVR) ceiling most mainstream lenders apply for cash-out, and translates usable equity into real-world buying power assuming a standard 20% deposit and ~6% acquisition costs.
When to use it
- Planning the next investment purchase from existing equity
- Sizing a renovation budget without selling existing assets
- Comparing refinance offers from competing lenders
- Modelling a debt recycling strategy
- Stress-testing portfolio LVR before a rate cycle
How to use it
- 1
Enter current property value
Use a recent bank valuation or kerbside estimate. Online valuers (CoreLogic, Domain) usually run within 5–10% of bank panel valuers.
- 2
Enter outstanding loan balance
Include any redraw you've already used. Available redraw is not equity — it's already debt.
- 3
Set the LVR cap
80% is the no-LMI default for owner-occupier and investment. Some lenders go to 85–90% with LMI; some specialist products go to 95%.
- 4
Choose the purpose
Investment shows buying power; renovation or lifestyle shows direct cash-out. Investment purpose can preserve negative gearing.
- 5
Review the result
Usable equity is the cash-out figure. Buying power factors in deposit (20%) + costs (~6%) to give the realistic next-property budget.
Methodology & assumptions
Total equity = current property value − outstanding loan balance. Usable equity = (LVR cap × value) − loan balance, floored at zero.
For investment buying power, we assume a 20% deposit and 6% of acquisition costs (stamp duty, legal, building & pest, broker), giving a buying-power factor of 26%. Buying power ≈ usable equity ÷ 0.26.
Cross-collateralisation is not assumed. Each equity release sits as a separate loan split, ideally with the new investment loan secured against the new property only.
The calculator ignores break costs on fixed loans and Lenders Mortgage Insurance above 80% LVR. Both materially change the economics of an equity release.
Common pitfalls we see
- Confusing redraw with usable equity. Redraw is a credit limit on existing debt; equity release is a new approval.
- Going above 80% LVR without modelling LMI. LMI on a $600k loan can exceed $20,000 and is rarely worth it for investment.
- Cross-securing the new property with the existing one. It complicates future sales and refinances.
- Forgetting the equity release needs new serviceability assessment — your borrowing capacity must support both loans.
Frequently asked questions
What is usable equity vs total equity?
Total equity is value minus loan balance. Usable equity is the slice a lender will release — typically the difference between 80% of value and your current loan balance.
Can I use equity to buy another investment property?
Yes — this is the standard second-purchase pathway in Australia. Usable equity funds the deposit and acquisition costs on the new property, while a separate new loan funds the balance.
Does releasing equity affect tax deductibility?
Yes — interest on borrowed funds is only deductible when the funds are used for an income-producing purpose. Equity used for an investment property is generally deductible; equity used for a holiday is not.
How much equity do I need to buy a $600,000 investment?
Roughly $156,000 of usable equity at 20% deposit + 6% costs. With a $600k purchase price this funds the $120k deposit and ~$36k of stamp duty, legal and lender costs.