Cash out is when you release the equity from your home using a home equity loan.
The funds are released directly to you when your mortgage is refinanced rather than to your solicitor as part of a property purchase.
Alternatively, the money can be released to another lender to consolidate any debt you have.
Can I get cash out?
- You can borrow up to 80% of the value of your property if you can provide a stated purpose (no evidence required).
- You can release up to 90% of the property value with evidence of the use of the funds.
- There is no limit on the amount that can be released.
Please call us on 1300 889 743 or enquire online and we’ll work out which lender can assist you with your plans.
Home equity calculator
You can use the calculator below to calculate how much you can cash out.
Your property value:$
Remaining loan amount:$
Disclaimer: This calculator is to be used as a guide to help you better understand your options. We have not assessed what options are suitable for your needs or if you meet other lending criteria that would allow you to access your equity. Any repayments quoted above are calculated using your current home loan balance over a term of 30 years. We strongly recommend that you make additional repayments and pay your loan off sooner. If you borrow over 80% of the property value then you may pay an LMI premium.
What is cash out?
Any home loan which has the funds released to you directly is considered to be cash out by the banks. Some banks will decline your application due to the amount of equity being released and what your intentions are.
Some examples are:
- Minor cosmetic renovations.
- Debt consolidation.
- Investment in shares.
- Releasing equity to use as a deposit on your next property.
- Buying a business or for investment in your business.
Whereas other types of loans aren’t considered to be cash out, and so are not subject to restrictions:
- Construction loans.
- Funds to purchase a specific property with a signed contract as evidence.
- Refinancing an existing home loan.
How much cash out is acceptable?
Most lenders require evidence of the purpose of the loan if you’re releasing more than $10,000 to $50,000 as cash out. This requirement is particularly strict for people seeking a low doc loan.
Our best lenders only require you to disclose the purpose of your loan, but you don’t have to provide evidence!
How much cash out can I release?
One of our lenders will allow you to release up to 90% of the value of your home, up to a maximum of $800,000 or up to 80% of the value of your home up to $1,000,000.
For example, if your home is worth $1.25 million then you may be entitled to borrow $1 million.
These funds can be released as either a Line of Credit, into an offset account or into your bank account to use as you see fit.
Why is "cash out" so risky?
When your equity loan is advanced by the bank, a large lump sum of money is released directly into your bank account or into a line of credit for you to use later.
Once this has been done, the banks no longer have any control over how you use those funds.
Banks are concerned that you won’t use the funds according to your intended purpose. Some people may use the money to make the loan repayments because they’re living beyond their means.
Can I release equity for investment purposes?
The most common reason that people apply for an equity loan is to use the funds to invest in property or shares. This is one of our specialities!
We can recommend you a specific loan product, with no cash out restrictions and the features you need to get the maximum benefit out of your investments.
Discuss your investment goals with us on 1300 889 743 or enquire online.
Our responsible lending commitment
We always endeavour to fully understand your needs and aim to offer you expert help to get the most suitable loan product available.
Our mortgage brokers are committed to responsible lending practices. We won’t help you to get a loan unless there’s a clear benefit to you, and a low risk that you’ll misuse the funds.
How can I apply for a cash out loan?
Please enquire online or dial 1300 889 743 to speak to one of our mortgage brokers who specialises in releasing cash out with a home equity loan.