Calculators
Usable equity calculator
The equity on your statement and the equity a lender will release are two different numbers. This works out both, then shows what the usable part could put towards the deposit and buying costs on a next purchase.
The property you own
Be conservative — a lender uses its own valuation, not a portal estimate.
Net of any offset balance you'd actually leave in place.
80% is the standard ceiling without mortgage insurance. Some lenders will go higher with LMI.
The next purchase
What the usable equity could actually fund.
Sets the transfer duty and registration fees on the next purchase.
On top of duty and registration — conveyancing, building and pest, application fees.
Usable equity
$200,000
You hold $380,000 of equity, and $200,000 of it could be borrowed against while keeping the loan at 80.0% LVR.
Equity on paper
$900,000 value less $520,000 owing
$380,000
Usable equity at 80.0% LVR
$200,000
Current LVR
Rises to 80.0% if you draw all of it
57.8%
Total lending after release
Your existing loan plus the equity release
$720,000
Costs on a $650,000 purchase
$22,275 of it is transfer duty
$27,109
Deposit left for the next place
26.6% of $650,000
$172,891
New loan you'd need
73.4% LVR on the new property
$477,109
Mortgage insurance on the new loan
The deposit is 20.0% or more
Not likely
Biggest purchase at a 20.0% deposit
Using all the usable equity for the deposit and the buying costs
$827,451
Email me these resultsPlus a quick note on what a lender would actually do with them.
How your property's value splits up
- Loan still owing$520,000
- Usable equity$200,000
- Buffer the lender keeps above 80.0%$180,000
Access depends on serviceability. A lender will assess the new lending on your income, expenses and existing commitments at a buffered rate — usable equity only tells you the security is there.
Under the bonnet
Assumptions & how we calculate
We show our working so you can judge the number, not just read it. Every lender applies its own policy on top of maths like this.
- Usable equity is the property value multiplied by the usable LVR, less the loan balance. The default 80% is the normal ceiling before lenders mortgage insurance applies.
- The property value is the visitor's own figure. A lender uses its own valuation, which can be lower than a portal estimate.
- Transfer duty, transfer registration and mortgage registration fees on the next purchase come from the selected state's published scale, with the concession for the buyer type applied. Legal, inspection and loan fees are an estimate.
- The deposit available is the usable equity less those costs, so the figure shown is what genuinely lands on the next purchase.
- The biggest purchase at a 20% deposit holds the cost ratio of the entered price constant, because duty scales are not linear.
- No serviceability test is applied. Releasing equity creates new lending that must pass the same income, expense and buffered-rate assessment as any other loan.
The information on this website is general in nature and does not take into account your personal objectives, financial situation or needs. Before acting on any information you should consider whether it is appropriate for you. Terms, conditions, fees, charges and normal lending criteria apply. Rates are subject to change.
FAQs
Questions people ask
What's the difference between equity and usable equity?
Equity is simply your property's value less what you owe. Usable equity is the part a lender will actually lend against, which normally means bringing the total lending up to 80% of the value. On a $900,000 property with $520,000 owing you have $380,000 of equity on paper, but only $200,000 of it is usable at 80% — the lender keeps the rest as its buffer.
Can I use equity as a deposit without selling?
Yes, and it is one of the most common ways people buy a second property. You either increase your existing loan (a top-up) or add a separate split, and the released funds become the deposit and buying costs on the next purchase. No cash changes hands from your savings, but you now have more debt against the first property.
Does having equity mean I'll be approved?
No, and this is the part that catches people. Usable equity tells you the security is there; it says nothing about serviceability. The new lending is assessed on your income, expenses and existing commitments at a buffered rate, exactly like any other loan. Plenty of people have equity and cannot service the debt it would create.
Can I go above 80% when releasing equity?
Some lenders will, with lenders mortgage insurance on the amount above 80%. Whether it is worth it depends on the premium against what the extra funds achieve. Set the usable LVR above to 85% or 90% to see how much more it frees up, then price the premium in the LMI calculator before deciding.
Whose valuation is used, and will mine come in lower?
The lender's. It orders its own valuation, and it can land below a portal estimate or a neighbour's sale price, particularly in a soft market or for an unusual property. Because usable equity is leveraged — every dollar of valuation shortfall costs you 80 cents of usable equity — it pays to run this calculator with a conservative value as well as an optimistic one.
Next step
Numbers looking good? Let's turn them into a pre-approval.
A calculator can't read a payslip or a lender's policy. Sachin can — book a free call and we'll check these numbers against 70+ lenders, then tell you what's actually possible.
Free, no obligation. General information only — not credit advice.