What Is Usable Equity?
Understanding the difference between total and usable equity.
Usable equity is the portion of your home's value that a bank will let you borrow against. Want a simple breakdown? Sorted NZ explains the difference between equity and usable equity here.
Here's the standard breakdown:
• Own home: You can usually borrow up to 80% of its value. These limits are based on Reserve Bank LVR rules, which can shift depending on market conditions.
• Investment property: Up to 70% of the value
So the usable equity is:
(Lending % of value) − Current Mortgage
The key is understanding that usable equity is usually less than your total equity — but it's still a powerful tool.
A Simple Example
See how usable equity works in practice.
Let's say:
• Your home is worth $800,000
• Your mortgage is $400,000
Your usable equity would be:
$800,000 × 80% = $640,000 − $400,000 = $240,000
That's $240K you might be able to put to work.
Remember, this is just an example — your actual usable equity will depend on your specific situation and the bank's criteria.
What Can You Use Equity For?
Common ways to leverage your equity.
Most clients use usable equity for things like:
• Purchasing a rental/investment property
• Renovating or upgrading their home
• Starting or growing a business
This is where good advice matters. Structuring things right from the start saves stress and interest later. You can also explore my mortgage services here to see how I help clients structure their next move.
The best use of equity depends on your goals — let's chat about what might work best for you.
Calculate Your Usable Equity
Use our free calculator to get a quick estimate.
You can use the calculator below to see what you might be working with.
It's quick, no personal info needed, and totally free.
How many properties do you own?
This will help us calculate your total usable equity across your property portfolio.
You own 1 property
Ready to explore your options? Book a free chat and we'll go through your specific situation together.
Want to Know Your Numbers?
Not sure about your equity position? Let's run the numbers together.
I'll help you understand your options and show you how to make the most of your equity.
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