Property equity calculator
Usable equity at this limit
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An estimate to help you plan, not an offer or approval. Lenders set their own policies, costs and limits.
Quick answer
This property equity calculator takes your property's value, everything owed against it and a loan-to-value limit you choose between 40% and 80%. It returns the usable equity at that limit, your current LVR, your total equity on paper and whether the result is large enough for a property-secured business loan, which starts at $20,000. It assumes no interest rate and no lender's policy.
Key points
- Usable equity is the value times your chosen limit, minus everything already owed
- Choosing commercial or rural changes the guidance note, not the maths: lower the slider yourself
- Each 5-point move on the slider is worth 5% of the property's value
- Below $20,000 of usable equity, most property-secured lenders won't be interested
Property is still the security that unlocks the most business credit in Australia. In its October 2025 Bulletin on small business conditions, the RBA put unsecured lending at below 5% of SME credit, and found a typical new home-backed SME loan runs roughly 4.5 times the size of one backed by vehicles, equipment or similar assets. So the question most owners need answered first isn’t “what will it cost” but “how much of my property can actually be borrowed against?” That’s what this calculator works out.
What you type in
The calculator has four inputs. Nothing else is assumed.
| Input | What to enter | Common mistake |
|---|---|---|
| Property value ($) | A realistic sale price today, ideally from recent nearby sales or an agent’s appraisal | Using the price you’d like to get |
| Total owed against it ($) | Every registered mortgage, private loan and caveat-secured debt on the title | Leaving out a second loan or a redraw limit |
| Property type | Residential, commercial or rural | Expecting this to change the figures (it doesn’t; see below) |
| Loan-to-value limit to test | A slider from 40% to 80% in 5-point steps | Testing only the top of the range |
About the property type buttons. Picking commercial or rural changes the note under the results, which explains how lenders tend to treat that kind of security. It does not lower the limit for you. If you’re working with a factory unit, a medical suite or a grazing block, move the slider down yourself to see a more conservative picture.
What comes out
Usable equity at this limit (the big number). The property value multiplied by your chosen limit, minus everything owed. If that comes out below zero, the calculator shows $0: at that limit there’s no room for more lending.
Current LVR. What you owe now as a percentage of the value. Lenders read this before anything else, because it shows how much cushion already exists.
Total equity on paper. Value minus debt, with no limit applied. The gap between this and the usable figure is the buffer a lender keeps for itself in case values fall or a sale takes time.
What it could support. A plain yes-or-no style line. If usable equity is $20,000 or more, it tells you property-secured business loans may be possible (our secured range runs from $20k to $5m). Below that, it flags that you’re under most secured lenders’ minimums.
Worked example: a warehouse with a mortgage on it
An owner of a joinery business holds the warehouse it trades from, in a family trust. It’s worth an estimated $1.4 million and $520,000 is owing to the bank. The business wants $250,000 to buy a second CNC router and carry more timber stock.
| Limit tested | Value × limit | Less owed | Usable equity |
|---|---|---|---|
| 60% | $840,000 | $520,000 | $320,000 |
| 65% | $910,000 | $520,000 | $390,000 |
| 70% | $980,000 | $520,000 | $460,000 |
Current LVR is 37.1%, and total equity on paper is $880,000. Because this is commercial security, the owner should anchor on the 60% row: even there, $320,000 of usable equity comfortably covers the $250,000 request with room for fees. Notice how each 5-point step on the slider moves the answer by $70,000, which is 5% of $1.4 million. On an expensive property, small changes in a lender’s policy matter a lot.
If the owner wanted to keep the bank relationship untouched, a second mortgage behind the existing loan is one route; refinancing everything into a larger first mortgage business loan is another. Our second mortgage calculator tests the first option in more detail.
Have the numbers and want someone to check them against real lender appetite? Tell us about the property; sending it costs you a minute and leaves your credit history alone.
Why your answer could be lower in real life
The calculator is honest arithmetic, but three things regularly shrink the figure once a lender gets involved.
- The valuation comes in under your estimate. Lenders order their own valuation, and valuers are conservative. Rerun the numbers with the property value 10% lower. If the deal still works, you’re on solid ground.
- Costs come out of the same pool. Establishment, valuation, legal and discharge fees are often deducted from the advance, so a $300,000 usable figure rarely means $300,000 in your account.
- Some properties are harder to lend on. Rural acreage, a unit in a small regional town, a strata hotel room or a property with an unusual zoning may sit well below the limit you tested. Our pages on borrowing against rural property and borrowing against commercial property go through what each kind of lender looks for.
It also helps to know the calculator ignores income. A bank also expects trading income to cover repayments, and the Reserve Bank’s 2018 review of small business finance noted that housing collateral has a significant effect on both the cost and availability of credit, not that it replaces repayment capacity. Pair this result with the business borrowing power calculator to see both sides.
Residential, commercial or rural: how lenders treat each
| Security | How lenders generally see it | Practical step on the slider |
|---|---|---|
| Metro or major regional house or unit or major regional area | The security most lenders prefer; the widest choice of banks and private lenders | Test 70% to 80% |
| Commercial or industrial | Widely accepted for business lending, but sale times are longer and buyers fewer | Test 60% to 70% |
| Rural or farmland | Specialist; fewer lenders, often with tighter limits and more questions on access and water | Test 50% to 60% |
| Vacant land | Treated cautiously because it earns no income | Test 40% to 55% |
These are planning bands, not policies. Every lender writes its own, and they change. The point is to avoid building a plan on a figure only the most generous lender in the market would accept.
Other tools that pair with this one
- LVR calculator if you already know the loan amount and want to check where it lands.
- Caveat loan calculator when the need is urgent and short and the security is a caveat lodged over the title.
- Bridging loan calculator if a sale is coming and you need money before it settles.
- Loan cost comparison calculator once you have two offers to weigh.
Where the property is the family home, read using home equity for a business loan before deciding. It covers the trade-offs of putting the family home behind the business. Our own lenders HomeSec Business Finance and EquityTap both lend against residential and commercial property for business purposes.
Turning equity into an actual offer
Equity on a spreadsheet only becomes useful when someone will lend against it on terms that suit the business. If your usable equity clears $20,000 at a sensible limit, there’s usually something worth talking about, even if the bank has already said no.
The enquiry form asks for the property, roughly what’s owed and what the money is for. Expect to spend about sixty seconds on it, and no credit enquiry is run because you asked. One team handles what you send, so your phone won’t light up with calls from lenders you’ve never heard of; instead, a specialist looks over your property and purpose and rings you to go through what’s realistic. Use the same honest numbers you entered here. A true value and the complete debt figure mean the first lender we suggest is likely to be the one that fits.
Frequently asked questions
What is the difference between equity and usable equity?
Equity is the property's value minus what you owe. Usable equity is the part a lender would actually lend against, after it keeps a buffer by capping total lending at a share of the value. A $1m property with $400k owing has $600k of equity, but at a 70% limit only $300k is usable.
Which LVR limit should I test?
Start at 70% for a well-located house or unit, then drop to 60% or 65% for commercial, industrial or specialised property and lower again for rural land. Run two or three limits. If the answer only works at the top of the range, expect fewer lenders and closer scrutiny.
Should I use my mortgage balance or my limit?
Use the limit if your existing loan has redraw or is a line of credit. Lenders count the full amount you could draw, not just what's drawn today, so entering the balance alone can overstate your usable equity.
Can I combine equity from two properties?
Often, yes. Run the calculator once for each property and add the usable equity. Be aware that offering both titles as security usually ties them together, so selling one later may need the lender's agreement.
Does the calculator check my credit or lodge anything?
No. It runs in your browser and nothing is stored or sent. It's a planning tool, not an application, and it can't approve or decline a loan.