How much of your equity can you actually use?
Your property has gained value, but the bank will not hand you the difference. Lenders cap how much you can borrow against, value the property their own way, and test whether you can afford the bigger loan. This calculator shows what is genuinely within reach, and what stands between you and it.
Find your usable equity
Equity is simple: what the property is worth, minus what you still owe on it. Usable equity is smaller. Most lenders will only lend against 80 per cent of a property's value, so the amount you can unlock is 80 per cent of the value, minus your current loan. Enter each property below and the calculator does the rest.
Above 80 per cent, most lenders charge Lenders Mortgage Insurance. LMI protects the bank, not you. It can run to many thousands of dollars and is usually added to the loan, so you pay interest on it too.
Six things that decide whether you get it
The calculator shows the ceiling. Whether you reach it depends on how a lender assesses you, and every one of these checks can shrink the number, sometimes to zero.
The bank's valuation, not yours
The lender orders its own valuation, often a desktop estimate, and it tends to be conservative. A valuation five per cent under your figure can wipe tens of thousands off your usable equity before anything else is considered.
Serviceability and the buffer
Released equity is new debt, so the lender tests whether your income covers the bigger repayments, assessed at roughly three percentage points above today's rate. Plenty of owners hold equity they cannot service.
LMI past 80 per cent
Borrow beyond 80 per cent of a property's value and Lenders Mortgage Insurance usually applies. It protects the bank if you default, you pay the premium, and it is normally capitalised onto the loan so it accrues interest too.
The purpose test
Lenders ask what the money is for. A renovation, an investment deposit or debt consolidation with evidence is usually acceptable. Vague or undisclosed purposes make approval harder, and the purpose can affect the rate you are offered.
Cross-collateralisation
Securing one loan against several properties ties them together. Sell one and the bank can demand the proceeds; one poor revaluation can drag the whole structure. Standalone loans per property keep you in control.
The clock restarts
Equity release is usually written over a fresh 25 or 30 year term. Spread that long, every dollar you draw can cost another dollar in interest unless the repayments are structured to clear it much faster.
Equity is a tool. The strategy is what you do with the loan.
Usable equity only grows two ways. The market lifts your property's value, which you cannot control, or your loan balance falls, which you can. Every dollar you take off the balance is a dollar of usable equity that does not depend on the next valuation, does not need LMI, and lowers the interest you are charged from the very next day.
That is why extraction is only half the picture. Drawing equity while the underlying loan drifts along on minimum repayments moves you backwards: more debt, more daily interest, a longer term. Drawing equity against a loan that is being driven down quickly is a different proposition entirely, because the structure underneath it is doing the work.
This is where FastPay sits. We do not lend money or arrange loans. We structure your everyday income so the balance falls faster, which is also the fastest way to build equity a bank will actually let you use.
Build equity the bank will let you use.
A free FastPay assessment shows how many years and how much interest you can save, on the income and lifestyle you have now, and what that does to your usable equity.
But my house is worth more now
Why rising home value is not the win it looks like.
Results are indicative only and should be used as a guide. They are neither a quote nor a pre-qualification, and they do not take your income, expenses, credit history or personal circumstances into account. The calculator applies the loan-to-value ratio you select to the property values you enter; a lender will use its own valuation and its own lending criteria, and the amount it approves, if any, may be significantly lower. Interest and repayment figures are simple estimates that exclude fees, Lenders Mortgage Insurance premiums and rate changes. Oculus FastPay is not a lender or a broker, does not arrange credit, and does not provide financial product advice. Consider seeking advice from a licensed professional before acting.