Equity and equity release
Equity is the difference between what a property is worth and what is owed on it; equity release borrows against it, usually up to a total of 80% of the valuation including the existing loan, for a deposit, a renovation or an investment.
Equity and equity release, explained.
Usable equity is an estimate based on the lender's valuation and permitted LVR, less the current loan. On a $1,200,000 home with a $500,000 loan, usable equity at 80% is $460,000.
Released equity is new borrowing and has to be serviced. The use of released equity matters for tax, and mixing investment and personal purposes in one loan can make the position harder to substantiate.
Tools that use this term.
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The Learn section is general information about lending in Australia. It does not take account of your objectives, financial situation or needs, is not credit assistance, and is not tax, legal or financial advice. Lender policies, government schedules and regulations change; check the current position with the relevant body or with us before relying on it.
