Last Updated: 7th August, 2023

Think of your equity as the money you would have left over if you sold your home, and repaid your home loan.

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.

The property equity calculator simply deducts the balance on your home loan from the estimated value of your home. Keep in mind that you can borrow only up to 80% of your home equity. Not sure how much your property is worth? We have written a guide to help you estimate the value of your home, so you can follow the guide to enter your property’s value in this calculator.

Why Is Equity So Important?

The equity in your home is usually the biggest asset you have. You can use your equity to make improvements to your home, buy investments or even help family members with a deposit for their first home. People who have little equity in their property when they reach retirement age may be forced to either downsize or continue working to repay the debt. So, you should aim to make optimum use of your equity and also be in a position to repay your home loan before you retire.

How Can You Access Your Home Equity?

To access your home equity, you must refinance your current home loan. This would involve taking out a new home loan for an amount greater than your existing loan and using the extra money to access your equity. The most common home equity loans are cash-out loans and using your equity in your current home to purchase another property. You can also use a line of credit or reverse mortgage to access your equity. A reverse mortgage and line of credit are a way to borrow money from your home. You can use the money for things like fixing your house or buying a new one. A line of credit is accessible to anyone with some equity in their home, but for a reverse mortgage, you first have to be at least 62 years old and fully own your home. The bank will give you a loan, and then you will pay that loan back over time with interest. However, these products are more expensive and should only be considered a last resort.

Is Accessing Your Home Equity Difficult?

Your home equity loan may be subject to equity release restrictions, also known as cash-out restrictions, which most banks have. Luckily, a cash-out equity loan is the only type of equity release loan that has such a restriction, plus, not all lenders have a strict cash-out policy so you can check with your lender regarding this. The funds released can then be used for any worthwhile purpose, including renovating your home, investing in property or consolidating debts.

How Can Your Home Equity Change?

The equity in your home can either increase or decrease. Your home equity can increase if you make timely repayments on your mortgage or if the price of your property increases in the market. Similarly, it can decrease if you refinance and release some of your equity or if the value of your property decreases. When it comes to taking a home equity loan, you are choosing to decrease the equity you have built up in your home. So, be certain you are making a wise investment with the released equity. Minimising unnecessary spending, making optimum use of the released equity, and aiming to pay off your home loan as soon as possible should be your goal.

Get A Home Equity Loan, Today!

We can help you get an equity-release home loan with the lender of your choice in the fastest turnaround time possible. Please call us on 1300 889 743 or enquire online and one of our mortgage brokers can assist you in accessing your equity.