How it works

Equity is the difference between the amount you owe on your home loan and the current value of your property. When buying an investment property, you could use the available equity in your current property as a deposit for your new loan.

Investment Pros Home Equity Loan Calculator helps you to get an idea of how much equity you could unlock to borrow more.

Assumptions

New balance

This is simply 80% of your estimated property value. This is not necessarily the amount you would be able to borrow from your lender which could be more or less. The lender will consider a range of things including what repayments you can afford, your credit history, the property valuation and whether you need a Lenders Mortgage Insurance (LMI).

Your monthly repayments are calculated assuming

• a Principal and Interest loan with the rate and remaining term you have input.
• the rate does not change for that remaining term.
• there are no ongoing fees payable.
• repayments are payable, and interest is charged, monthly and on the same day.

Length of month

All months are assumed to be of equal length. In reality, many loans accrue on a daily basis leading to a varying number of days' interest dependent on the number of days in the particular month.

Number of weeks & fortnights in a year

One year is assumed to contain exactly 52 weeks or 26 fortnights. This implicitly assumes that a year has 364 days rather than the actual 365 or 366.