Property equity and LVR calculator
See how your equity builds as your property grows in value and your loan comes down, and when you'd cross the 80%, 70% and 60% LVR marks that open up better rates and options.
Value, loan and the equity in between
The gap between value and loan is your equity. Where the loan sits under the dashed line, you have usable equity a lender may let you borrow against.
| LVR | When you'd reach it | What it can open up |
|---|---|---|
| 80% or less | Now | Usually no LMI to refinance or borrow more |
| 70% or less | Year 3 (2029) | Better rate tiers at many lenders |
| 60% or less | Year 6 (2032) | Often the sharpest rates on offer |
| 50% or less | Year 9 (2035) | A strong base to buy again or restructure |
In short: Equity is your property's value minus what you owe, and it grows two ways: prices rising and your loan coming down. Buy at $900,000 with a $720,000 loan at 6.5% and, with 4% a year growth, you'd have about $721,800 in equity after 10 years. About $432,200 of that gain comes from growth and $109,600 from your repayments.
How it works
What LVR means and why it matters
Loan-to-value ratio is your loan divided by the property's value. At 80% or below you usually avoid lenders mortgage insurance when you refinance or borrow more. Many lenders price their rates in LVR bands, so dropping under 70% or 60% can mean a sharper rate.
Growth vs paying it down
Growth does the heavy lifting early, but it isn't guaranteed. Paying the loan down is the part you control. In the example above, 4% growth takes the loan from 80% LVR to under 60% in about 6 years. With no growth at all, repayments alone would take about 15 years.
FAQ
Common questions
How do I work out the equity in my home?
Take the property's current value and subtract your loan balance. A $900,000 home with a $720,000 loan has $180,000 of equity, which is an LVR of 80%.
What is usable equity?
It's the equity a lender may let you borrow against, usually up to 80% of the value, minus what you owe. On a $1,000,000 home with a $600,000 loan, usable equity is about $200,000, subject to your income and the lender's policies.
What LVR do I need to avoid LMI?
Usually 80% or below. Some lenders waive LMI above 80% for certain professions, such as doctors, lawyers and accountants.
How fast does property grow in value?
It varies a lot by suburb, property type and time period, and prices can fall. That's why this calculator lets you test a few growth rates, including zero, rather than assuming one.
Can I use my equity to buy an investment property?
Often, yes. Lenders can let you borrow against usable equity for a deposit and costs, as long as you can afford both loans. How it's structured matters for tax, so talk to us before you sign anything.
Home Loans & Property
Read before you decide
General information only. These calculators give estimates based on the figures you enter and published rates, and don't consider your objectives, financial situation or needs. They're not a quote, credit assessment or tax advice. Elephant Financial Pty Ltd trading as Elephant Advisory is an authorised credit representative (ACR 487962) of Yellow Brick Road Aggregation Pty Ltd, Australian Credit Licence 390261.
