Azure Home Loans

Usable equity calculator — how much equity can you actually borrow?

Your home’s value minus your loan is total equity. A lender only releases the part below 80% of its valuation without LMI, or 90% with it. Enter two numbers and see the figure you could really borrow, what it adds to your repayments, and what it could fund.

Free · no sign-up · nothing leaves your browser · ACR 538895, auth. under ACL 390261 · General information, not credit advice.

Usable equity calculator

Two numbers. The result is what a lender will actually let you borrow against your home — not the headline equity figure.

What your home is worth today

Use a realistic sale price. The lender orders its own valuation and it is usually more conservative than an online estimate.

What you still owe

Current balance across every loan secured by this property. Money in offset does not reduce the balance the bank uses for LVR.

What would you use it for?

Investment propertyRenovationDebt consolidation

Rate used to price the extra borrowing

Interest rate (% p.a.)

Default 6.29% is an owner-occupier variable rate with the cash rate at 4.60%. Lenders usually assess you at this rate plus a 3-point buffer.

Usable equity without LMI

$170,000

Your home is worth $900,000 and you owe $550,000, so paper equity is $350,000. A lender will only go to 80% of value without LMI — that leaves $170,000 you could actually borrow.

$550,000Still owing
$170,000Usable to 80%
$90,00080–90% with LMI
$90,000Bank's buffer

Total equity: $350,000; value minus debt
With LMI, to 90%: $260,000; LMI roughly $15,163
Your LVR now: 61.1%; 18.9 points under 80%

What $170,000 could fund

As a 20% deposit plus about 5% for stamp duty and costs, it covers an investment property around $680,000 with no LMI on the new loan.

Stretch it to a 10% deposit plus costs and the price reaches about $1,133,000, but LMI applies on the purchase loan and both loans must pass serviceability together.

Model the purchase in the Investor Deal Analyser →

Cost of using it

Borrowing the full $170,000 adds about $1,051/month at 6.29%. The lender tests that at roughly 9.29% — equity gets you to the door, income gets you through it.

If the valuer comes in lower

5% under ($855,000)$134,000
10% under ($810,000)$98,000

Usable equity at 80% on the lower valuation.

Check what lenders would release

General information only. These calculators provide estimates based on the numbers you enter. They do not constitute credit advice, take your full situation into account, or replace a lender's assessment. Fees, eligibility, and actual offers vary. Speak with a broker for guidance tailored to you.

Why a $150,000 rise in value is not $150,000 you can spend

Say you bought for $750,000 and the suburb has moved: the home is now worth $900,000. That is $150,000 of new equity on paper. A lender does not see $150,000. It sees a property it will lend 80% against — $720,000 — and a loan of $550,000. The gap, $170,000, is what it will release without LMI, and that includes equity you had before prices moved.

Three things shrink the number further. The bank values the property itself, and a valuation 5% under your figure cuts usable equity to $134,000. The new loan has to pass serviceability at about 9.29% — the extra $1,051 a month is tested as roughly $1,403. And most lenders want to know the purpose; unspecified “cash out” is capped or declined above 80% and sometimes below it.

None of that makes equity useless. $170,000 is a 20% deposit plus costs on an investment property around $680,000. It just means the planning number is the usable figure, not the headline.

The formula

Total equity: Value − loan = $350,000
Usable equity, no LMI: Value × 80% − loan = $170,000
Usable equity, with LMI: Value × 90% − loan = $260,000, LMI about $15,163
Monthly cost of drawing it: $170,000 at 6.29% over 30 years ≈ $1,051

Usable equity by home value and how much you still owe

Bold is the figure available without LMI (80% of value minus the loan). The smaller figure beneath is the ceiling with LMI (90%). Find your value, then the column closest to the share of it you still owe.

Usable equity at 80% and 90% loan-to-value ratio by property value and loan balance as a share of value
Home value	Owing 40%	Owing 50%	Owing 60%	Owing 70%
$600,000	$240,000$300,000 with LMI · owing $240,000	$180,000$240,000 with LMI · owing $300,000	$120,000$180,000 with LMI · owing $360,000	$60,000$120,000 with LMI · owing $420,000
$750,000	$300,000$375,000 with LMI · owing $300,000	$225,000$300,000 with LMI · owing $375,000	$150,000$225,000 with LMI · owing $450,000	$75,000$150,000 with LMI · owing $525,000
$900,000	$360,000$450,000 with LMI · owing $360,000	$270,000$360,000 with LMI · owing $450,000	$180,000$270,000 with LMI · owing $540,000	$90,000$180,000 with LMI · owing $630,000
$1,000,000	$400,000$500,000 with LMI · owing $400,000	$300,000$400,000 with LMI · owing $500,000	$200,000$300,000 with LMI · owing $600,000	$100,000$200,000 with LMI · owing $700,000
$1,250,000	$500,000$625,000 with LMI · owing $500,000	$375,000$500,000 with LMI · owing $625,000	$250,000$375,000 with LMI · owing $750,000	$125,000$250,000 with LMI · owing $875,000
$1,500,000	$600,000$750,000 with LMI · owing $600,000	$450,000$600,000 with LMI · owing $750,000	$300,000$450,000 with LMI · owing $900,000	$150,000$300,000 with LMI · owing $1,050,000

Lender valuation, not purchase price. Every figure assumes the lender accepts the stated value and the borrower passes serviceability on the larger loan.

What usable equity can fund

Lenders ask the purpose, and the purpose changes how easily the loan is placed. The three most common uses, with the worked example of $170,000.

Investment property deposit

As a 20% deposit plus about 5% for stamp duty and costs, $170,000 supports a purchase around $680,000 with no LMI on the new loan, or about $1,133,000 at 10% plus costs with LMI. Set the equity up as a separate split so the investment interest stays identifiable for tax.

Model the deal →

Renovation

Drawing the full amount adds about $1,051 a month. Lenders generally want quotes above modest sums, and structural work with progress payments is a construction loan, not an equity release. The property is valued as it stands today, so the renovation only grows usable equity if the finished value rises by more than it cost.

Construction loans explained →

Debt consolidation

Rolling cards and personal loans into the mortgage swaps double-digit rates for a home loan rate and lowers the monthly figure. The trap is the term: a five-year car loan stretched over 30 years can cost more in total interest even at the lower rate. Keep repayments at the old level and the saving is real.

How consolidation works →

How lenders assess an equity release

ValuationDesktop, kerbside or full inspection depending on loan size and LVR. You cannot pick the valuer; a broker can order upfront valuations with several lenders so you know the figure before applying.
LVR after the releaseAt or under 80% is the open door. 80–90% means LMI on the whole loan and a shorter list of lenders. Above 90%, equity release is rare.
ServiceabilityThe whole new balance is tested at the actual rate plus a 3-point buffer, with living expenses, other debts and any rental income shaded. Equity gets you to the door; income gets you through it.
Purpose and evidenceA contract of sale, renovation quotes or statements for the debts being consolidated. Unspecified cash-out is capped by many lenders and refused by some at higher LVRs.

How this calculator works, and what it is not

Method: Usable equity = property value × lending ceiling − loan balance, at 80% and 90%. The monthly cost is a standard principal-and-interest repayment on the drawn amount over 30 years. The investment price is the equity divided by deposit share plus 5% costs.
Assumptions: Default rate 6.29% (owner-occupier variable with the cash rate at 4.60%), adjustable in the tool. LMI shown is an illustrative premium on the whole loan at 90%; insurers’ actual tables vary by lender and loan size. Valuation sensitivity rows apply 5% and 10% haircuts.
What it is not: Not a credit assessment or an offer. Lenders use their own valuation and policy, cap cash-out, and test serviceability on the full new balance. Tax deductibility of interest depends on use — confirm with your accountant.
Who maintains it: Bishnu Adhikari, Azure Home Loans (ACR 538895, auth. under ACL 390261). Figures and lender rules reviewed 12 October 2026. Rate-sensitive copy is re-read after each decision on the RBA meeting dates page.

Run the numbers on a related tool — then enquire with your scenario mapped out.

Usable equity — frequently asked questions

What is usable equity?

Usable equity is the part of your home equity a lender will actually let you borrow against. Lenders lend to a ceiling — normally 80% of their valuation without lenders mortgage insurance — so usable equity is 80% of the value minus what you still owe. On a $900,000 home with $550,000 owing, total equity is $350,000 but usable equity without LMI is $170,000 ($720,000 minus $550,000).

How do I calculate usable equity?

Multiply your property value by 0.8, then subtract your current loan balance. Property value $900,000 × 0.8 = $720,000; minus a $550,000 loan leaves $170,000 usable without LMI. To see the figure with LMI, use 0.9 instead: $810,000 minus $550,000 = $260,000, with an LMI premium payable on the larger loan. The calculator above does both and shows the extra repayment each would add.

What is the difference between equity and usable equity?

Equity is value minus debt — the number you hear at a barbecue. Usable equity is the slice above your loan but below the lender’s lending ceiling. The gap between the two is the buffer the bank keeps against a fall in prices or a conservative valuation: 20% of the value without LMI, 10% with it. That is why a $150,000 rise in your home’s value does not mean $150,000 you can spend; at 80% it unlocks $120,000 at most, and only if you can service the extra loan.

Can I access equity above 80% of my home’s value?

Sometimes, up to around 90%, and lenders mortgage insurance applies on the whole loan. Many lenders cap or refuse “cash out” — equity released without a stated purpose — above 80%, and some cap it in dollar terms even below that line. Releasing equity for an investment property deposit or a renovation with quotes is generally easier to place than an unspecified lump sum. Above 90% almost no lender will release equity.

How much equity do I need to buy an investment property?

As a planning rule, usable equity of about a quarter of the target purchase price: a 20% deposit plus roughly 5% for stamp duty, legal and other costs. $170,000 of usable equity supports a purchase near $680,000 without LMI on the new loan. With a 10% deposit plus costs (15% of price) it stretches to about $1.13 million, but LMI applies and both loans must pass the lender’s serviceability test together.

Does releasing equity increase my repayments?

Yes — it is new borrowing. Drawing $170,000 at 6.29% over 30 years adds about $1,051 a month in principal and interest; $100,000 adds about $618. The lender also tests the new total at roughly 3 percentage points above the actual rate (around $1,403 a month on $170,000 at 9.29%), so having the equity is only half the approval. Income, expenses and existing commitments decide the rest.

How do lenders value my home for an equity release?

With their own valuation, not your estimate. Depending on the loan size and LVR it may be an automated desktop valuation, a kerbside inspection or a full internal inspection by a panel valuer. Valuations tend to sit below listing estimates, and a 5% shortfall on a $900,000 home cuts usable equity at 80% from $170,000 to $134,000. A broker can often order upfront valuations with several lenders before you apply, so you know which figure you are working with.

Is an equity release the same as a cash-out refinance or a top-up?

They are different routes to the same result. A top-up increases your existing loan with your current lender. A cash-out refinance moves the loan to a new lender at a higher amount, often to get a sharper rate at the same time. Either can be set up as a separate loan split, which keeps investment borrowing apart from the home loan for tax records. Which route suits you depends on your current rate, fixed-rate break costs and the new lender’s cash-out policy.

Does money in my offset account count as equity?

Not for LVR. The lender calculates LVR on the loan balance, so $50,000 in offset does not lower your LVR or raise usable equity. It does count as funds you already have, which is often simpler than borrowing more: using offset cash for a deposit avoids new borrowing, while leaving it in place and drawing equity keeps your cash buffer. Which is better depends on tax deductibility and how much liquidity you want to keep.

What can I use home equity for?

Common, lender-friendly purposes are a deposit on an investment property, renovations, consolidating higher-rate debts and buying a car. Lenders ask the purpose and may want evidence such as a contract of sale or renovation quotes. Business working capital, share trading and unspecified cash-out face tighter limits. Interest on equity used for an investment property or shares may be tax-deductible while interest on equity used for a holiday or car is not — keep the splits separate and confirm with your accountant.

Want the real number from real lenders?

Upfront valuations, cash-out policies and serviceability differ by lender, so the usable figure moves by tens of thousands between banks. Bishnu Adhikari can run your property across the panel before you commit to a purchase or a renovation.

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