If you own a home or investment property and it’s increased in value there’s a strong chance that you’ve built up some equity.
You can borrow against this equity with a home equity loan and use that money to buy a second home or investment property, renovate your existing property or for other purposes.
For over 15 years I’ve worked as a mortgage broker in Sydney helping home owners and investors unlock the value in their portfolios through home equity loans and refinancing.
With access to 50+ lenders and experience working with a wide variety of clients – from full time employees, to self employed and seniors – I’ll be able to help you secure the right home equity loan for your needs at the best possible rates.
Get in touch with me today for a free consultation.
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Your home equity is the difference between your home’s market value and the mortgage still owing on the property. Over time if your property has increased in value and you’ve continued to pay down your mortgage then your equity grows in size.
For example, if you have a property worth $1,000,000 and your remaining mortgage is only $500,000.
This equity can be a valuable resource that you can borrow against for a variety of purposes and these funds can be used as a deposit on your next property or could be used to renovate your existing property potentially increasing it’s value further.
Rather than visiting a single bank, at Freedom Finance Group you’ll get access to expert guidance and over 50+ lenders. I’m committed to finding you the best home equity loan that is tailored to you.
I’ll provide you with unbiased advice and help make the complex process of applying for a loan extremely simple. Saving you all that time and stress. I am passionate about turning complex financial jargon into clear, actionable advice and am always available to answer questions and address concerns.
If you’re looking for a mortgage broker who combines extensive industry knowledge with a heartfelt commitment to your financial well-being, let’s connect. Together, we can turn your dreams into reality.
Home equity represents the difference between your mortgage balance and your home’s market value. It reflects the portion of the property that you truly own.
As you continue to make mortgage payments and the property’s value appreciates, your home equity typically grows. Essentially, home equity is calculated as the current market value of your home minus any outstanding debts, such as mortgages.
Market Value – Outstanding Debt = Equity Amount
eg. $1,000,000 (Market Value) – $300,000 (Mortgage) = $700,000 (Equity)
It serves as a valuable asset that can be leveraged to address financial needs, such as consolidating high-interest debt, using it to purchase another property or renovating your home.
In Australia a typical bank will allow a borrower to access up to 80% of the property with no lender mortgage insurance (LMI) and up to 90% with LMI.
This means if you have a property worth $1,000,000 you can usually borrow up to $800,000 (80% of the total property value).
If you had a mortgage of $500,000 on that property your “equity” would be $500,000 but your “accessible equity” without paying LMI would only be $300,000 (as you can only borrow up to $800,000).
(Market Value) x 80% – (Outstanding Debt) = (Accessible Equity)
eg. $1,000,000 (Market Value) x 80% = $800,000 – $500,000 (mortgage) = $300,000 (Accessible Equity)
A home equity loan is often used to consolidate additional debt, complete home renovations or to be used as a deposit to purchase another property.
But it can be used for most personal or investment purposes.
Home equity loans can be accessed with most banks for either investment or personal use. The banks will determine your interest rate depending on the purpose of the use of the funds.
For example using your equity to purchase a family vehicle will get you interest rates charged based on owner occupied basis. Additionally borrowing money to invest in shares will be based on investment home loan rates.
A qualified mortgage broker can assist with supporting you access equity. For any enquiries about speaking to someone get in contact with the team at Freedom Finance Group here.
There are some downsides to home equity loans that you should be aware of before applying for one:
1. Cost of Refinancing: Be aware of the fees associated with an equity refinance, such as application and valuation costs, and any potential break fees for early mortgage termination. Calculate these expenses to determine if refinancing is financially beneficial.
2. Impact on Loan Term: Refinancing often resets your mortgage term, which can extend the loan duration and increase the total interest paid over the course of the loan. Consider how an equity refinance can affect your long-term financial plans.
3. Credit Score Impact: Each equity refinance application results in a hard inquiry on your credit report. Frequent and multiple application submissions may cause a poor credit score.
Dealing with an experienced broker who understands the complexities of loan applications can keep the number of application submitted to a minimum and in turn keep your credit score maintained.
A mortgage brokers job is to explain to you everything involved in the process of access equity. They will provide you with options from multiple lenders were you can compare the different interest rates, costs and borrowing power to make an informed decision.
Additionally they will handle the submission process from start to finish making it a simple and easy process. To speak with one of our qualified team about access your home equity click here.
We offer a wide range of services to meet all your needs:
If you're purchasing a residential home loan to live in we'll find you a lender with the most competitive rates
Invest in your future with an investment property loan. We'll secure you competitive rates and loan features such as offset accounts so you can maximise your return on investment.
Access the equity in your home with a home equity loan. These loans can be used to renovate and improve your property or even to help you purchase an investment property.
You could be saving thousands on your home loan. I'll help you assess your current loan and help you find a refinancing option to save you money and help you pay off your mortgage faster.
If you are purchasing your first home there are government schemes and special loan options available. I'll advise you on the latest offerings so you can purchase your first home sooner.
Building brand new or renovating an existing property? I'll help you secure a construction loan so you can get the job done right.
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| Walk you through the entire mortgage processs | |
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| Negotiate the best rates from every lender | |
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| Available via phone, email, video call or in-person | |
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| Regularly review your loan to ensure you're getting the best rates | |
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| Free friendly advice and information with no obligation | |
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| Assist you with government grants and LMI waivers | |
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| 20+ 5-Star Google reviews | |
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We throughly assess your financial situation, including your income, expenses, credit history, and long-term goals
We compare interest rates, loan terms, fees, and other factors to find a deal that aligns with your needs.
We finalise all the paperwork and coordinate with other parties, such as lenders and conveyancers, to ensure your loan is approved.
Your mortgage journey doesn’t end at settlement. As it evolves, our experts remain by your side.
Typically home equity is built in 3 ways:
A home equity release is when you complete a new application for additional funds on top of your existing debt for personal or investment purpose.
The proceeds of the release are typically deposited into your nominated account by your chosen lender for use.
A HELOC loan most commonly referred to in Australia as an equity loan is a type of home loan were someone can access the value in their property to borrow against.
The term HELOC is not often associated with Australian banks and new loan applications as it is a term often used in the USA. Click here to learn more about HELOC vs home equity loans in Australia.
All major banks and the majority of other smaller lenders offer equity loans for their clients.
We have access to 40+ lenders and can assess your situation and see which lenders are able to offer you a home equity loan. We will also help you to secure the best possible rates on your home equity loan.
To apply for a home equity loan is simple.
The first step is to engage with your finance broker to review your options. Your broker will first determine your ability to borrow and figure out what your home is worth.
They will ask you to provide supporting documents such as payslips and bank statements to support the information you are telling them is accurate.
With those figures now complete your broker will provide you with options from multiple lenders so that you can determine what suits you the most.
Once a lender has been picked your broker will complete the submission and organise a new loan approval with home loan contract documents issued to the client.
On acceptance and signing of the documents your broker will lodge the paper work with the lender, in most cases it’s digital and gets processed as soon as its accepted by the client.
At that stage a discharge of mortgage is submitted with the existing lender to release the existing loan.
Once the existing loan is ready to be released a settlement date will be booked in to have the debt repaid and equity proceeds transferred to the client.
Our experienced team of mortgage brokers can help you navigate this process every step of the way. Click here to get in contact with us for a free consultation.
