Equity Calculator for Australian Property Investors
Find out how much equity you have built up in your property and, just as importantly, how much of it you can actually use. Enter your property value, your current loan balance and a target LVR, and this free calculator shows your current equity, your loan-to-value ratio, and the usable equity you could borrow against to buy again or renovate.
It is built around the way Australian lenders look at equity, so the numbers reflect what a bank is likely to lend rather than just the paper value of your home.
Available Equity: The amount you could potentially access by refinancing to your target LVR.
Max Borrow Amount: The maximum loan amount at your target LVR (Property Value × Target LVR %).
Note: Actual lending amounts depend on your financial position, serviceability, and lender criteria. This calculator provides estimates only.
How the equity calculator works
- 1
Enter your property value
Use a realistic current market value, ideally based on a recent appraisal, a bank valuation, or comparable sales nearby. Lenders rely on their own valuation, which can come in lower than an agent's estimate.
- 2
Enter your current loan balance
Put in what you still owe on the property today, not the original loan amount. If you have an offset account, use the loan balance itself, since the offset does not reduce the amount the lender sees as outstanding.
- 3
Set your target LVR
This is the loan-to-value ratio you want to borrow up to. 80% is the usual ceiling before lenders mortgage insurance applies. You can push to 85% or 90%, but expect to pay LMI on the amount above 80%.
- 4
Read your current equity and LVR
The calculator shows your equity, which is the value minus the loan, and your current LVR, which is the loan as a percentage of the value. A lower LVR means more room to borrow.
- 5
Check your usable equity
This is the gap between your target borrowing limit and your current loan. It is the equity you could realistically access through a refinance or a second loan, subject to the lender approving the application.
A worked Australian example
Say your property is now worth $550,000, you still owe $360,000 on the loan, and you want to borrow up to a standard 80% LVR to fund the deposit on your next purchase.
- Property value
- $550,000
- Current loan balance
- -$360,000
- Current equity
- $190,000
- Max borrowing at 80% LVR ($550,000 x 80%)
- $440,000
- Less current loan balance
- -$360,000
- Usable equity at 80% LVR
- $80,000
On paper you have $190,000 of equity, and your current LVR is about 65.5%. But the bank will not hand over all of it. At an 80% LVR, your borrowing is capped at $440,000, and you already owe $360,000, so the usable equity is around $80,000. That is the figure you could draw on for your next deposit and costs, assuming your income supports the larger loan. Pushing to a 90% LVR would unlock more, but you would then pay lenders mortgage insurance on the portion above 80%.
What is equity and what is usable equity?
Equity is the share of your property you actually own: the current market value minus whatever you still owe on the loan. If your property is worth $550,000 and you owe $360,000, your equity is $190,000. It grows as you pay down the loan and as the property rises in value.
Usable equity is the part of that equity a lender will let you borrow against. Banks keep a buffer, so they typically lend up to 80% of the value before lenders mortgage insurance applies. Usable equity is the difference between that 80% ceiling and your current loan, which is why it is always less than your total equity.
How lenders work out what you can access
Most lenders cap standard borrowing at 80% of the property value. They take 80% of the value, subtract what you already owe, and the remainder is the equity you can release. In the worked example, 80% of $550,000 is $440,000, less the $360,000 loan, which leaves $80,000.
Having usable equity on paper does not guarantee approval. The lender still assesses serviceability: your income, expenses, existing debts and living costs all feed into whether you can afford the larger repayments. Equity opens the door, but your borrowing capacity decides how far you can walk through it.
Using equity to buy your next property
Many Australian investors grow a portfolio by tapping equity rather than saving a fresh cash deposit each time. You release equity from one property, usually as a separate loan split or a line of credit, and use it for the deposit and purchase costs on the next one.
As a rough guide, the deposit and costs on a new purchase often come to around 20% to 25% of its price once you allow for stamp duty and conveyancing. So $80,000 of usable equity might support a deposit and costs on a property in the low-to-mid $300,000s. Confirm the actual numbers with your lender and a mortgage broker before you commit.
Equity is not the same as cash flow
Releasing equity increases your loan, which means higher interest and higher repayments. The equity itself is not free money: it is borrowed, and it has to be serviced. A property can be rich in equity yet still cost you money to hold each month.
Before you draw on equity, it pays to check that the new loan still works for your weekly cash flow, especially if the property you are buying is negatively geared. Plenty of investors have plenty of equity but get caught short on the day-to-day cost of holding the loans.
Frequently asked questions
How do you calculate equity in a property?
Equity is your property's current market value minus the balance still owing on the loan. For a property worth $550,000 with a $360,000 loan, your equity is $190,000. It increases as you pay down the loan and as the property grows in value.
How much of my equity can I actually use?
Usually less than your total equity. Lenders generally cap borrowing at 80% of the property value before lenders mortgage insurance applies. Your usable equity is 80% of the value minus your current loan. In the example above, that is $440,000 minus $360,000, or about $80,000.
What is the 80% rule for equity?
It refers to the 80% LVR threshold most lenders use as a comfort point. You can typically borrow up to 80% of a property's value without paying lenders mortgage insurance. Above 80%, lenders usually require LMI, which adds a one-off cost, so many investors aim to keep their borrowing at or below that line.
Can I access equity above 80% LVR?
Often yes, up to around 90% with some lenders, but you will generally pay lenders mortgage insurance on the portion above 80%, and serviceability rules still apply. Lender policy varies and changes, so confirm what is available with your lender or a mortgage broker.
Does using equity mean I have to sell my property?
No. Accessing equity means borrowing against the property, usually by refinancing or adding a separate loan split, while keeping ownership. You only realise equity as cash by selling. Borrowing against it lets you reinvest without triggering capital gains tax, though it does increase your loan and repayments.
How do I get my property revalued to release equity?
Your lender arranges a valuation when you apply to refinance or increase your loan. A higher valuation lifts your equity and your usable equity. Bank valuations can be more conservative than an agent's appraisal, so treat this calculator as an estimate until the lender's valuation comes back.
Related calculators
Calculate your Loan-to-Value Ratio and find out if Lenders Mortgage Insurance (LMI) applies.
Open calculator →Estimate monthly mortgage repayments based on different interest rates and loan terms.
Open calculator →Get an idea of the stamp duty costs you'll need to pay when purchasing a property in any Australian state.
Open calculator →Figure out your monthly cash flow by inputting rental income and expenses to see if you're in the positive or negative.
Open calculator →Project your property's future value based on an annual appreciation rate.
Open calculator →