Home Equity Release & Usable Equity Calculator
Calculate usable equity at 80% LVR, how much you can release, and the repayments on the new loan.
Last reviewed by the myCalculator Editorial Team
Input Parameters
Calculation Results
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Formula & How Home Equity Release & Usable Equity Calculator Works
Total equity is the property value less the loan balance, but lenders only release equity down to an 80% loan-to-value ratio without triggering Lenders Mortgage Insurance. Usable equity is therefore 80% of the valuation less the existing debt. Releasing equity increases the secured debt against your home, so the new repayment must still pass the lender's serviceability assessment. Worked example: a $900,000 property with a $400,000 loan has $500,000 of total equity. Lenders usually only release equity down to 80% of the value, which is 0.8 × 900,000 − 400,000 = $320,000 of usable equity. Borrowing that amount at 6% over 25 years would cost about $2,062 a month. Equity is not free money, so work out what the new debt would cost before you use it.
- Enter Current Property Value ($) ($): Input your target parameter value.
- Enter Existing Loan Balance ($) ($): Input your target parameter value.
- Enter New Interest Rate (% p.a.) (%): Input your target parameter value.
- Enter New Loan Term (Years) (years): Input your target parameter value.
- Apply Formula: Calculate using
Usable Equity = (Value × 80%) - Existing Loan | Total Equity = Value - Existing Loan. - Review Results: View exact computed answers, metrics, and worked mathematical proofs.
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Frequently Asked Questions (FAQs)
How much equity can I access without paying LMI?
Down to 80% LVR. On a $900,000 property with a $400,000 loan, that is $720,000 less $400,000 — about $320,000 of usable equity before LMI applies.
Is released equity tax deductible?
Deductibility follows the use of the funds, not the security. Equity used to buy an investment property generates deductible interest; equity used for a car or holiday does not.
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Authoritative Standards & Verified Reference Citations
Calculations and mathematical logic on this page are grounded in published statutory rules, regulatory standards, and official government data published by the following bodies:
Consumer guidance on mortgage borrowing capacity, compound interest formulas, and loan fees.
Official cash rate target announcements, monetary policy statements, and national economic statistical data.
Official U.S. Federal Funds Rate and comprehensive macroeconomic time-series data.
Key Eurozone interest rates, deposit facility rates, and monetary policy operations.
Residential mortgage serviceability buffer framework (3.0% stress test hurdle rate).
Dedicated Australian home loans, borrowing capacity, mortgage repayments & refinance modeling.