04 Sep Unlocking the Potential of Your Property Value
What is Equity?
Equity is the difference between your property’s current market value and the remaining balance on your mortgage. As your property’s value increases and your loan is paid down, your equity grows and that equity can be a powerful tool.
Many homeowners aren’t aware that they can access this equity through a cash-out loan. This type of loan allows you to release some of the value tied up in your home and use it as a deposit or funding source for an investment property.
If you’ve been thinking about building wealth through real estate, now might be the perfect time to explore how your existing property could help you take the next step. Let’s look into what value your property may be at now and how you can use your equity.
How can we help access your equity?
If you’ve built up equity in your home, there are a few ways to tap into it. One of the most common methods is through a cash-out refinance or top-up loan. This involves increasing your existing loan to access the usable equity you’ve built over time.
The funds you release can be used for a range of purposes, but many clients choose to reinvest into property, using the equity as a deposit for their next investment. The process is straightforward: we assess your current property value, calculate your usable equity, and work with lenders to find the most suitable loan structure for your goals.
Whether you’re looking to grow your portfolio, renovate, or simply make your equity work harder for you, we’re here to guide you through the options and help you make informed decisions.
Common Uses for Cash-Out Loans
- Owner-Occupied or Investment Property Purchase
- Renovations or home improvements
- Debt consolidation
- Education expenses
- Business investment
- Emergency or unexpected costs
- Lifestyle purchases
How does it work?
Let’s say you have a property that you purchased back in 2021 with a 20% deposit. You purchased the property for $600,000 with a $480,000 loan (80% Loan-to-Value Ratio)
Since then you’ve paid the loan down to $440,000 and your property price has grown up to $750,000. You’re loan-to-value ratio is now down to 58%, and, you have $310,000 in equity.
Now, an important thing to note is that not all of this is usable equity, the $310,000 is merely the difference between your mortgage owing and your property value. In this situation, most lenders allow you to borrow up to 80% of the property’s value without paying LMI (Lenders Mortgage Insurance).
So how much is usable equity?
- 80% of $750,000 = $600,000 –> What lender will let you borrow up to against your property which has now grown in value
- Existing loan = $440,000 –> What you have left on your original loan that you used for your purchase in 2021
- Usable Equity = $160,000 –> Difference between what the lender will let you borrow and what you still owe
How has the property market behaved over the past five years and how much has your property grown?
Back in 2020 when interest rates were dropped to below 2%, this setup the next five years to be the fastest growth period for property prices in Australia, People were able to borrow more and buy properties that better suited their needs and lifestyle. As prices surged, those who already owned property or purchased during this time saw a significant increase in equity, giving them greater financial flexibility and the opportunity to reinvest.
However, many home-owners are unaware of these gains that they’ve acquired over the years, or, just don’t know what they can do with it.
So where might your property value be up to now?
Median Price Increase
The median property price in Australia rose by 38.4% from March 2020 to February 2025, adding approximately $227,000 to the median dwelling value.
Regional Strength
Regional properties are performing well over the past 5 years with a growth rate of 56.3%.
Capital City Growth
Capital city property prices have surged over the past five years, with median values in some cities climbing by nearly 80% according to new data from PropTrack.
| Capital City | Median Price Growth (Past 5 Years) |
|---|---|
| Adelaide | 77.8% |
| Brisbane | 73.4% |
| Perth | 72.7% |
| Sydney | 59.2% |
| Hobart | 37.9% |
| Darwin | 33.0% |
| Melbourne | 14.8% |
Owning an investment property in one of these capital cities could open up a world of opportunity for releasing equity and reinvesting back into the market.
Get in Touch
If you think your property has grown in value and you have some usable equity, feel free to get in touch with us through our contact us page, or call us – 02 9894 1234.
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