Equity
Finance & Loans
The difference between your property's current market value and the amount you still owe on the mortgage.
Full Explanation
Equity builds as you pay down your loan and as the property increases in value. Usable equity is the portion a lender will let you access, typically up to 80% of the property's value minus your outstanding loan. Investors commonly use equity in one property as a deposit for the next, enabling portfolio growth without saving additional cash.
Example
Your property is worth $700,000 and you owe $400,000, giving you $300,000 in total equity and approximately $160,000 in usable equity.
Frequently Asked Questions
How do I access equity in my property?
You can access equity by refinancing your existing loan to a higher amount, or by setting up a separate equity release or line of credit facility. The funds can then be used as a deposit for another investment.
What is the difference between total equity and usable equity?
Total equity is the full difference between the property value and your loan balance. Usable equity is the amount a lender will actually let you borrow, typically calculated as 80% of the property value minus your current loan.