Equity and LVR calculator
See how much equity you could borrow against a home, investment or commercial property for a business loan, and what your current loan to value ratio is.
Usable equity at 70% LVR
$250,000
- Current LVR
- 45%
- Total lending limit at this LVR
- $700,000
Based on the values you enter. A lender's valuation and your ability to repay decide the final amount.
Check your finance options| LVR | Total lending limit | Usable equity |
|---|---|---|
| 60% | $600,000 | $150,000 |
| 65% | $650,000 | $200,000 |
| 70% | $700,000 | $250,000 |
| 75% | $750,000 | $300,000 |
| 80% | $800,000 | $350,000 |
What is usable equity?
Equity is the difference between what a property is worth and what you owe on it. Usable equity is the part a lender will actually lend against. Lenders cap total borrowing at a maximum loan to value ratio (LVR), so usable equity is the property value multiplied by that LVR, less the loans already secured on it. A $1,000,000 home with $450,000 owing has $550,000 of equity, but at a 70% LVR the usable equity is $250,000.
What LVR do business lenders use?
| Loan type | Typical maximum LVR |
|---|---|
| Bank loan secured by residential property | Often up to around 80% |
| Second mortgage | Commonly around 70% to 80% combined |
| Caveat loan | Commonly at or below around 70% combined |
| Private first mortgage | Commonly around 65% to 75% |
| Commercial property | Commonly around 65% to 70% |
Typical ranges only. Lenders apply lower limits to regional, specialised, rural and vacant property, and every lender has its own policy.
What value will a lender use?
The lender's valuer sets the value, not an online estimate or the price you paid years ago. Valuers are usually conservative, so it's sensible to run the calculator at a slightly lower value than you expect. For commercial property, the valuation also reflects the lease, the tenant and the yield.
Can you borrow against two properties?
Yes. Lenders can take security over more than one property, which combines the equity across them. That can help when one property has little equity on its own. The calculator lets you add a second property to see the combined position. Each property still has to meet the lender's requirements, and owners of each property usually need to sign as guarantors.
What else decides how much you can borrow?
Equity sets the ceiling. For bank and non-bank loans, your ability to make repayments sets the actual amount, based on business income, existing debts and credit history. Private and short-term lenders rely more on the equity and the exit plan, which is why they can lend when a bank won't. Borrowing against a home for a business must be for a genuine business purpose, and your home is at risk if the loan isn't repaid.
Equity and LVR calculator: common questions
What is a good LVR?
For borrowing against a home, staying at or below 80% opens most bank options, while short-term and private business loans usually need total borrowing at or below 65% to 75%. Lower is better: it means more choice of lenders, lower rates and more room if the property's value falls.
Can I use home equity for a business loan?
Yes, if the loan is genuinely for a business purpose such as working capital, a tax debt or buying equipment or premises. Lenders will ask you to confirm the purpose in writing. Home loans for personal purposes fall under consumer credit law, which FundFox doesn't arrange.
How do I find out what my property is worth?
An online estimate gives a rough starting point, but lenders rely on their own valuation, which is often more conservative. Recent comparable sales in your street are the best guide. For commercial property, the lease, tenant and yield matter as much as the building.
Does a second mortgage count toward my LVR?
Yes. Lenders look at total borrowing secured on the property, so the first mortgage, any second mortgage and any caveat loan all count toward the combined LVR. That's why second mortgage and caveat lenders cap the combined total, not just their own loan.
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