Equity is the slice of your property you actually own: its current value minus what you still owe. It grows quietly through repayments and price growth, and it is the raw material for almost every wealth move homeowners make.
Equity vs usable equity
Total equity is value minus loan. Usable equity is what a lender will let you borrow against without LMI: 80% of the value, minus the loan. A $1,000,000 home with a $550,000 loan holds $450,000 of equity, but $250,000 of usable equity (80% of $1m is $800,000, minus $550,000).
Punch your property value and loan balance into the usable equity calculator.
Open the equity calculator →How equity grows (and shrinks)
- Repayments: every principal payment converts debt into ownership.
- Price growth: the bigger driver in most decades, and it compounds.
- Renovations: can add value beyond their cost, when chosen well.
- Market falls: the reverse is also true; equity is a valuation snapshot, not a guarantee.
What equity can do
Fund a renovation or release, a deposit for an investment property, an upgrade to the next home, or better loan pricing through a lower LVR band. The common thread: the lender’s valuation decides everything, and valuations differ between lenders by 5 to 10% on the same property.
That spread is why Nathan orders free valuations with multiple lenders before any equity strategy: the highest honest valuation is worth real money.