We have a lender on our panel that has increased its maximum cash out amount to $500,000 if your LVR is less than or equal to 80%. You can cash out up to $250,000 if your LVR is less than or equal to 80%. No documentary evidence required in either case.
What Is Cash Out?
Any home loan that has the funds released to you directly is considered cash out by the banks. You can cash out your equity in a home by refinancing your current home loan. Some banks will decline your application due to the amount of equity you want released and how you plan to use it.
Some examples of purposes of cash out most banks will accept include:
- 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 cash out loans, so they are not subject to restrictions. These include:
- Construction loans
- Funds to purchase a specific property, with a signed contract as evidence
- Refinancing an existing home loan
Can I Cash Out?
Yes, you can cash out if you have built up enough equity in your property.
Use the home equity calculator below to determine your equity.
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.
By cashing out the equity you have built up:
- You can borrow up to 80% of the value of your property, minus what you still owe on it, if you can provide a stated purpose (no evidence required).
- You can release up to 90% of the property value, minus what you owe on it, with evidence of the use of the funds.
- There is no dollar-figure limit on the amount that can be released.
- Most lenders require you to maintain 20% of the equity in your home.
- All lenders do not have the same policies. The terms and conditions you had to follow with your previous loan could be different from those for the cash-out loan. So, look into the new lender’s policy before refinancing, to see if you are comfortable with the terms.
- Factor in the costs of getting a home loan. Some of the amount you cash out could be used to cover those costs.
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!
Frequently Asked Questions
Our best lenders require you only to disclose the purpose of your loan, you don’t have to provide evidence.
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 – again, minus what you still owe on the home, in both cases.
For example, if your home is worth $1.25 million, and you owe $600,000 on it, then you may be entitled to borrow:
$1 million – $600,000 = $400,000
These funds can be released either as a Line of Credit, into an offset account, or into another bank account to use as you see fit.
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 loan repayments because they’re living beyond their means.
We can recommend 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.
Things To Remember Before Cashing Out Your Equity
Below are the most important points you need to keep in mind when thinking of cashing out your equity:
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 helping you engage with 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.