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New Zealand Usable Equity Calculator

See how much of your home's equity you could actually borrow against, capped at your bank's maximum LVR, plus your total equity and an indicative budget for a next purchase.

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%

The highest loan-to-value ratio your bank will lend to. 80% is the usual benchmark for owner-occupiers.

%

Deposit required on the property you'd buy with the equity. Around 20% for another home, or more for an investment. Used only for the indicative budget.

Usable equity$240,000.00
Total equity$400,000.00Property value minus your current loan
Current LVR50.0%Current loan against the property value
New total lending$640,000.00Current loan plus the usable equity drawn
Indicative property budget$1,200,000.00Rough guide only, using usable equity as the deposit — before income and servicing checks

How this calculator works

Your total equity is the property value less what you still owe. Usable equity is smaller, because a bank will only lend up to a maximum loan-to-value ratio, commonly 80% for owner-occupiers. The usable amount is that capped lending less your current loan:

Usable equity = (property value × max LVR) − current loan

The indicative budget takes that usable equity as the deposit on a next purchase and grosses it up by the deposit percentage you enter. It is a rough ceiling only; the bank's income and servicing tests, not your equity, are usually what decides how much you can actually borrow.

Worked example

Say your home is worth $800,000 and you owe $400,000. Your total equity is $400,000, but at an 80% cap the bank will lend up to $640,000, so your usable equity is $240,000. Used as a 20% deposit on a next home, that points to an indicative budget of around $1.2 million, before any check on whether your income can service the larger loan. Push the LVR cap down to an investor's level and the usable figure falls accordingly.

What changes the answer

  • Property value — a higher value lifts the amount the LVR cap allows you to borrow.
  • Current loan — the more you still owe, the less headroom remains under the cap.
  • Maximum LVR — owner-occupiers usually reach 80%; investors are often held lower, which cuts usable equity.
  • Servicing — not in the equity sum at all, but in practice the real limit on what you can draw.

A note on accuracy

This calculator works on full, unrounded figures and rounds only for display. It shows the equity ceiling set by a maximum LVR and does not model income, servicing tests, low-equity margins above 80%, or a bank's valuation of your property. For general guidance, see Sorted, and our methodology for the formulas and sources.

Frequently asked questions

What is usable equity?

Usable equity is the part of your equity a bank will actually lend against, keeping your total lending within its maximum LVR. Most banks cap owner-occupier lending at 80% of the property value, so your usable equity is 80% of the value minus what you still owe. It is less than your total equity, because banks will not lend against the last 20% of the home's value.

How do I access the equity in my home?

Usually by topping up your existing loan or adding a revolving-credit facility secured against the property, up to the bank's LVR limit. The bank will often want a current valuation, and the top-up is new lending that has to pass the same income and servicing checks as any loan. The money can then go toward a deposit on another property, renovations, or other approved purposes.

How much equity can I use to buy an investment property?

Your usable equity can act as the deposit on the next purchase, but the deposit required is higher for investors. Owner-occupier lending is typically capped at 80% LVR, while investor lending is often held to a lower limit, so you generally need a larger deposit for a rental. New builds are usually exempt from the tighter investor limits. The indicative budget here uses whatever deposit percentage you enter.

Does having usable equity mean I will be approved?

No. Equity is only half the picture; the bank still applies its income and servicing tests, checking you can afford the larger total lending at a stressed test rate. Plenty of people have equity on paper but cannot service the extra borrowing. Treat usable equity as the ceiling set by your property's value, not a guarantee of approval.

What is the difference between total equity and usable equity?

Total equity is simply your property value minus your loan; it is what you would have if you sold and repaid the mortgage. Usable equity is smaller: it is the amount you can borrow against while keeping your lending within the bank's maximum LVR. This calculator shows both so the gap is clear.

Related calculators

LVR & Deposit CalculatorCheck your loan-to-value ratio and deposit position.Borrowing Power CalculatorSee how much a bank would lend once servicing is included.