How to calculate property equity and capital growth
Property equity is current market value minus the outstanding loan balance. Capital growth is current market value minus the purchase price. Repaying debt can increase equity even when the property’s value has not changed.
Worked example: equity and growth are different
A property bought for $750,000 is now valued at $900,000, with $500,000 left on the loan. Equity is $400,000. Capital growth versus purchase is $150,000, or 20% of the purchase price. These are cumulative changes, not annual returns.
Debt repayment increases equity
If the value remains $900,000 and you repay another $50,000 of principal, equity rises to $450,000. Capital growth remains $150,000. An offset account can reduce interest charged, but its balance is not a repayment of loan principal and is not subtracted again in the equity calculation.
Negative equity and falling values
A property worth $600,000 with a $650,000 loan has negative equity of $50,000. If its purchase price was $750,000, capital growth is negative $150,000, or −20%. The calculator preserves these negative figures.
Equity is not sale proceeds or borrowing approval
This snapshot excludes selling costs, tax and other liabilities. It does not calculate how much a lender will let you borrow. Enter your own current valuation and outstanding principal. Until edited, the calculator visibly uses the purchase price and original loan as defaults.
Try the residential calculator or commercial calculator. Read the methodology and limitations before using the results.