Projected home equity
Property value minus projected secured debt
Australia · AUD
Australia home equity calculator.
Estimate how much of your property you own, usable equity at a target LVR and the effect of additional secured borrowing.
Property-value sensitivity
Estimated equity after proposed borrowing and immediate mortgage paydown
| Value change | Property value | Secured debt | Home equity | Equity percentage | Combined LVR |
|---|
Year-by-year equity projection
Uses your entered property-growth and mortgage-paydown assumptions
| Year | Property value | Existing secured debt | New borrowing | Total debt | Home equity | Combined LVR |
|---|
Planning estimate only—not a valuation, credit decision or commitment to lend. A lender assesses income, expenses, credit, loan purpose, property, valuation and serviceability. Borrowing secured against your home puts the property at risk if repayments are not made.
Australian homeowner guide
How much equity do you have in your home?
Home equity is the estimated value of your property minus the mortgage and any other debt secured against it. If a home is worth $900,000 and secured debt totals $520,000, estimated total equity is $380,000. Equity can rise as principal is repaid or the property value increases, and it can fall when prices decline or additional debt is borrowed.
Total equity is not the same as usable or borrowable equity. A lender uses its own valuation and loan-to-value ratio limit, then assesses whether you can afford the new debt.
How usable equity is calculated in Australia
A common planning method is to multiply the property value by a target LVR—often 80%—and subtract current secured debt. Using an 80% target on a $900,000 property gives a maximum planning debt of $720,000. After subtracting a $520,000 mortgage, the estimated usable equity is $200,000.
Eighty per cent is a planning assumption, not a universal entitlement. Some lenders or purposes may permit a different LVR, while valuation, serviceability, credit history, income and expenses may reduce the amount available. Borrowing above 80% LVR can also involve lenders mortgage insurance.
Loan increase or top-up
An existing lender may increase the home loan or create a separate loan split. Keeping the new purpose separate can make repayments and records easier to follow.
Refinance and cash out
Refinancing can move the mortgage and release approved equity, but discharge, application, valuation, legal, break and possible duty costs should be considered.
Line of credit
A line of credit provides reusable borrowing secured by the home. A variable balance and interest-only payments can make it harder to reduce debt, so compare the cost with an amortising split.
Reverse mortgage
A reverse mortgage is a different later-life equity-release product. Interest and fees may compound without regular repayments, so this standard borrowing calculator does not model it.
Home equity loan repayments and risks
The payment section compares an amortising loan split with an interest-only line-of-credit estimate. An amortising payment reduces principal over the selected term. An interest-only payment covers interest but leaves the borrowed balance unchanged, so the displayed total assumes the principal is still repaid at the end.
MoneySmart warns that consolidating debt into a home loan can cost more over a longer term and places the home at risk. Compare interest rates, fees and total repayments, not only the initial monthly payment. See the current MoneySmart debt consolidation and refinancing guidance.
Why property-value scenarios matter
Usable equity depends on the accepted property value. The sensitivity table shows how a 10% or 20% decline could reduce equity and increase LVR after the proposed borrowing. The long-term projection is an illustration, not a property-price forecast; growth and annual mortgage paydown may be higher, lower or uneven.
For a focused ratio comparison, use the Australia LVR calculator. To compare a new mortgage payment and total interest, use the Australia mortgage calculator.
Reverse mortgages and equity release are different
MoneySmart explains that reverse mortgages and other home-equity release arrangements have distinct eligibility, costs and long-term effects. Reverse mortgage interest commonly compounds and the balance grows over time. Read the MoneySmart home equity release guide and seek independent advice before considering one.
Australia home equity questions
How do I calculate home equity?
Subtract all mortgages and other debts secured against the property from its current estimated value.
What does usable equity mean?
Usable equity is an estimate of additional secured borrowing room under a chosen LVR. At an 80% target it equals 80% of the accepted property value minus current secured debt, if the result is positive.
Can I borrow all of my home equity?
Usually not. Lenders retain an equity margin, apply an LVR ceiling and assess serviceability, credit, loan purpose and the property.
Does a bank use my property estimate?
No. A lender may order or use its own valuation. If that value is lower, your calculated equity and borrowing room will also be lower.
Can equity be used for renovations or investment?
Potentially, subject to lender approval. Loan purpose can affect product terms, documentation, tax treatment and risk, so obtain appropriate professional advice.
Can home equity become negative?
Yes. Negative equity occurs when total debt secured against the property exceeds its value.