Equity & useable equity calculator
Calculate the equity and useable equity of your owner-occupied property to see what you could use as a deposit for an investment property.
How to calculate equity and what it means
Equity is the difference between the current market value of your property and the outstanding balance on your mortgage:
Equity = Property value - Mortgage balance
For example, a home worth $600,000 with a mortgage of $300,000 has $300,000 in equity.
It represents the portion of the property you effectively own and grows over time through capital appreciation and, on principal and interest loans, debt reduction.
Useable equity is the portion of your equity that a lender will typically allow you to access for a new purchase. In New Zealand, most lenders will lend up to 80% of a property's value.
Useable equity = (Property value x 80%) - Mortgage balance
For example, a home worth $600,000 with a mortgage of $300,000 has $180,000 in useable equity.
This is the figure that matters when you are planning your next investment - not your total equity.
Understanding your useable equity position is one of the first steps in assessing whether you are ready to invest again. The deposit required varies depending on what you are buying. New-build properties typically require a 20% deposit, while existing properties require 30% under current NZ lending rules. This calculator shows your useable equity position and how far it could stretch as a deposit on your next purchase.
For a full analysis of any specific property you are considering, a Paragon report gives you an independent assessment before you commit.