If you own property in Australia, there’s a good chance you’ve built up equity — especially if you’ve held the property for a few years.
But what is equity, really? And how do you unlock it without putting your financial position at risk?
Let’s break it down.
What Is Home Equity?
Equity = Property Value – Loan Balance
It’s the difference between your home’s current market value and how much you still owe on your mortgage.
For example:
If your property is worth $800,000 and your loan balance is $500,000, you have $300,000 in equity.
However, not all equity is accessible. Most lenders allow you to borrow up to 80% of your home’s value — and that portion is called your usable equity.
Why Access Equity?
Many homeowners are sitting on equity but aren’t using it. That could mean missed financial opportunities.
Here’s what you can do with it:
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Renovate to improve comfort and property value
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Invest in a second property to grow wealth
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Start or expand a business
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Pay off high-interest debt like credit cards or personal loans
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Fund education or support family goals
Using equity doesn’t mean selling your home — it usually means refinancing or applying for a line of credit secured against your existing property.
How to Access Your Equity
The most common way is through refinancing, where you replace your current mortgage with a new one that allows you to draw on your usable equity.
Here’s how it typically works:
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Your property is revalued
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Your lender calculates your maximum borrowing (usually 80% LVR)
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You refinance to access the additional funds
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You use the equity as needed — while repaying it as part of your mortgage
In some cases, you can use equity as a deposit for a second property without contributing additional cash.
Risks and Things to Consider
Using equity increases your loan balance, so you’ll pay more interest over time — unless the funds are used productively (e.g. investing or reducing higher-cost debt).
Things to check before using equity:
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Can your cash flow handle the increased repayments?
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Will the use of funds create long-term value?
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Are there any fees or lender restrictions?
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Will it impact your loan term or rate?
This is where working with a mortgage broker is critical — we help you assess the strategy, not just the numbers.
Final Thought
Equity is a powerful financial tool — but only if you use it wisely. Whether you’re planning a renovation, investing, or simplifying your finances, unlocking your home equity can give you more flexibility and control over your future.
Want to find out how much usable equity you have — and how to make it work for you?
📞 Call/WhatsApp: +84 96 275 92 07
📧 Email: support@sw-globalfinance.com.au
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