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Equity, in lending terms, is the net value of your property after taking out existing mortgage balances.
Bearing in mind that lenders adopt a loan to valuation ratio (LVR) of 80% of your property value (90% if you want to pay mortgage insurance or meet certain professional employment criteria), the equity value that a lender applies is scaled back to reflect that 80% LVR.
Take a home worth $750,000 with a mortgage of $350,000 – you have $400,000 in equity built up. Adopting the 80% LVR rule from a lender perspective your usable equity is:
$750,000 x 80% = $600,000, subtract $250,0000 = $250,000.
This equity then allows you to:
When its used to build your wealth, equity can be a very powerful tool.
If you would like an idea of what your equity is and what it means for you in terms of growing your wealth, hit us up for a chat and let’s make this year, the year to get ahead.
Contact Bribie Island Lending - mark@bribieislandlending.com.au
We are based on the beautiful Queensland coast, between the Sunshine Coast & Brisbane and we offer a complimentary home loan broking service.
Make an appointment today for an obligation-free chat, to talk about what you need and how we can help.
We recently helped clients refinance a home loan with a sky-high interest rate (over 10%) and clear their ATO debt and personal loans all while keeping repayments steady. With equity and the right paperwork, we reduced their rate to under 7% and gave them a clean slate. If tax debt is weighing you down, let’s talk strategy.
After a challenging property search full of delays, setbacks, and a long probate process, a Moreton Bay area couple finally settled on their dream home. Thanks to early planning, lender coordination, and strategic negotiation, they secured the property and moved in months before settlement.
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From 1 October 2025, all first home buyers will be able to purchase with just a 5% deposit under the expanded First Home Buyer Guarantee. There will be no income limits, no caps on places, and higher property price caps.
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