Home Equity Calculator: Formula, Example and What the Result Means
Calculates your home equity and how much of it lenders will usually let you use. This guide walks through what each input means, the formula behind the answer and a worked example using typical Australian figures. You can follow along in the free Home Equity Calculator.
Why it matters
Buying property in Australia involves a deposit, stamp duty, lender requirements such as the APRA serviceability buffer, and ongoing repayments that move with interest rates. Investors also weigh rental yield, negative gearing and capital gains tax.
What you need to enter
The calculator asks for 2 inputs. The table shows each one with the example value used later in this guide.
| Input | Example value |
|---|---|
| Property value ($) | 900000 |
| Loan balance ($) | 450000 |
The formula
Equity = value − loan. Usable equity = value × 80% − loan.
Worked example
Entering the example values above gives these results:
| Result | Value |
|---|---|
| Usable equity (80% LVR) | $270,000.00 |
| Total equity | $450,000.00 |
| Current LVR | 50% |
The headline figure is $270,000.00 (usable equity (80% LVR)). Change any input in the calculator and every result updates instantly, so you can test different scenarios side by side.
How the usable equity (80% LVR) changes with property value
The table below keeps every other input at the example value and moves only “Property value ($)” up and down by 10% and 20%. It shows how sensitive the usable equity (80% LVR) is to that one figure.
| Property value ($) | Usable equity (80% LVR) |
|---|---|
| 720,000 | $126,000.00 |
| 810,000 | $198,000.00 |
| 900,000 | $270,000.00 |
| 990,000 | $342,000.00 |
| 1,080,000 | $414,000.00 |
At 720,000 the result is $126,000.00; at 1,080,000 it is $414,000.00. If a small change in this input moves the answer a lot, it is worth double-checking that figure before you rely on the result.
A practical tip
Using equity means borrowing more. Your repayments rise, and so does your risk if prices fall.
Keep going
Before relying on the number, read Home Equity: What to Check Before You Trust the Number. You might also find these guides useful:
- Using a Property Purchase Costs Calculator in Australia: A Step-by-Step Guide
- First Home Super Saver Calculator Explained for Australians
- Using a Mortgage Repayment Calculator in Australia: A Step-by-Step Guide
Frequently asked questions
- Do these calculators match what my bank will say?
- Lenders use their own models, expense benchmarks and policies. Use these results to prepare, then speak to a lender or broker.
- Are stamp duty rates current?
- Duty thresholds are indexed or changed regularly. Always confirm with your state revenue office before relying on a figure.
- Is this financial advice?
- No. The calculators give general estimates only and don’t consider your objectives or financial situation.
Run your own numbers in the Home Equity Calculator.
Open the calculatorGeneral information only. Rates and thresholds change, usually on 1 July. Confirm current figures with the ATO or the relevant authority, and get personal advice for decisions about your situation.