Enter what your home is worth and what you owe. You'll see the equity a lender would usually let you use, the price of the next purchase it could fund, and how both change if the bank's valuation comes in lower than yours.
If the bank values it lower—
The next purchase, on equity alone
Your value
Lower
What the calculator follows
Usable equity is the home’s value times the LVR cap, less what you owe, and never below zero. The next purchase is the highest price where that equity covers the deposit (the part of the price above the same LVR), NSW transfer duty and your other costs, with the rest borrowed against the new property. Duty comes from the verified brackets our stamp duty calculator uses, without first home concessions, since an investment purchase doesn’t get them.
What it doesn’t do, so you can discount it. It doesn’t check whether your income supports the combined debt, which is usually the tighter limit; the borrowing power calculator gives a rough view of that. The value is yours, not the lender’s. And it assumes the new loan runs at the same LVR as the equity release, with no LMI.
Before you go looking
How the loans are set up matters as much as how much equity there is. Our guide to using equity to buy an investment property covers valuations, cross-collateral against standalone loans, and keeping the investment borrowing separate for tax. The negative gearing calculator shows what the purchase would cost to hold. This page is general information, not advice.
Thinking of using your equity? We'll check it against a lender's valuation first.
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It's the level above which lenders generally charge lenders mortgage insurance, as Moneysmart explains. Lenders will lend more with LMI, and a few waive it for some professions, so the cap is yours to change. Borrowing past 80% of both properties costs LMI and leaves less room if values fall.
Is the maximum price what I can borrow?
No. It's what your equity could fund as a deposit and costs. Whether your income supports the new loan on top of the old one is a separate test, done at the lender's rate plus APRA's 3 percentage point buffer, and it's usually the tighter limit. Our borrowing power calculator gives a rough view of that side.
Whose value counts, mine or the bank's?
The bank's. The lender orders its own valuation, and it can differ from an agent's appraisal or what the house next door sold for. Every $100,000 the valuation comes in lower cuts usable equity by $80,000 at an 80% cap, which is why the lower-valuation row is there.
Does the equity loan have to be secured on my home?
The equity release is secured on the home, but it can be a separate loan from the one on the new property. Keeping them separate, rather than securing one loan over both, keeps the lender from having a say over both properties when you sell one. Our guide goes through it.
Is the interest on the equity loan tax deductible?
It depends on what the money is used for, not what secures it. Borrowed against your home and used to buy an investment property, the interest is generally deductible; mixed with private spending in the same loan, it has to be split. Your accountant should confirm your situation.