Free Tool · Property Financing
Home Equity Calculator
Work out your usable home equity — how much you can borrow against your home or release by refinancing — based on your property value, mortgage balance and loan-to-value ratio (LVR) limits.
Work out your usable home equity — how much you can borrow against your home or release by refinancing — based on your property value, mortgage balance and loan-to-value ratio (LVR) limits.
Last reviewed 12 July 2026 · rates and thresholds verified against official FY2026-27 sources.
Your home equity is the gap between what your home is worth and what you still owe on it — and it grows as your property rises in value and you pay down the loan. This home equity calculator works out how much equity you have and, just as importantly, how much of it you can actually borrow against. Turning some of that equity into cash you can spend — by refinancing, increasing your loan, or setting up a separate facility against the same property — is what's known as releasing equity.
The important distinction is between total equity and usable equity. Total equity is simply value minus your mortgage. Usable equity is the slice a lender will actually let you draw on — and in Australia that is typically capped at around 80% of the property's value before Lenders Mortgage Insurance (LMI) is triggered. This 80% threshold is a long-standing industry convention reinforced by the prudential standards the Australian Prudential Regulation Authority (APRA) sets for banks. It is why a homeowner can be "equity rich" on paper yet find the bank will only release a fraction of that figure.
For many Australians, home equity is the single largest source of funds they can access without selling. Used carefully, it can bring forward a renovation, fund the deposit on an investment property, or consolidate expensive debt. Used carelessly, it converts a problem you could have walked away from into one secured against the roof over your head.
This calculator works out four numbers from three inputs — your current property value, your outstanding mortgage, and the maximum LVR your lender allows (commonly 80%). The formulas, in words, are:
The key insight is that "available to release" is almost always smaller than your total equity, because the lender keeps a buffer (the 20% you cannot borrow against at 80% LVR). The tool assumes the LVR ceiling is the only limit. In reality, your income, expenses and existing commitments also have to pass the lender's serviceability test before any of that equity is actually advanced.
Assume a home currently valued at $650,000, an outstanding mortgage of $400,000, and a lender willing to lend up to 80% LVR.
So although there is $250,000 of equity in the property, only about $120,000 is usable equity at the 80% line. If this homeowner wanted to access more, they could pay LMI to push the LVR higher, or wait for the property to grow in value (or pay the loan down further), which lifts the 80% ceiling over time. Note this is a borrowing-capacity estimate only — actual approval depends on serviceability, a fresh lender valuation (which may differ from your estimate), and the lender's own credit policy.
If releasing equity pushes your LVR above 80%, most lenders require Lenders Mortgage Insurance. LMI protects the lender, not you, if you default, and the premium rises sharply with LVR. As a rough guide it might be a fraction of a percent of the loan at 81–85% LVR and several percent approaching 90%, but premiums vary by insurer, loan size and state — get a quote for your situation. LMI can usually be capitalised (added to the loan) rather than paid upfront.
This tool estimates your usable equity based purely on property value, current debt and the LVR ceiling. It does not assess serviceability (income and expenses), it does not include LMI, stamp duty, refinancing or valuation fees, and it does not factor in your credit history or the lender's specific policy. It is a starting point for understanding your position, not a loan approval. For guidance on borrowing and home equity, the Australian Securities and Investments Commission (ASIC) publishes independent information at moneysmart.gov.au.
Generally up to 80% of your property's value minus your current loan, before LMI applies. Beyond 80% you can sometimes borrow more by paying LMI, but lenders rarely release equity above 90% LVR. The amount also has to pass the lender's income and serviceability test, so the figure here is a ceiling, not a guarantee.
Deductibility depends on what the borrowed money is used for, not what it is secured against. If you use the funds to buy an income-producing asset such as a rental property or shares, the interest is generally deductible; if you use it for personal purposes such as a holiday or renovating your own home, it is not. The ATO sets the rules — see ato.gov.au and confirm your situation with a registered tax agent.
Redraw lets you take back extra repayments you have already made — it is your own money and usually requires no new application. Equity release is fresh borrowing against the increased value of your home, which means a new loan assessment, possibly a valuation, and potentially LMI if it pushes your LVR above 80%.
Yes. Releasing equity increases your loan balance, so your minimum repayments rise unless you extend the loan term. It is worth modelling the new repayment at a buffered interest rate before you commit, to make sure it remains comfortable if rates move.
This page is general information only and is not personal financial advice. Consider your own circumstances and speak with a licensed mortgage broker, financial adviser or accountant before releasing equity.