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How to refinance a home loan and access to equity for the next opportunity




Yes, the interest rate is rising and we are living in a high inflation environment. While it is important to check your financial ability to prepare for the upcoming rate rises, it is also worth reviewing your other options to grow your wealth.

If you have bought your property before Covid-19, now is a good time to check how much equity you can access while checking the refinancing option that might also minimize the repayment increase by changing a lender providing a lower interest rate to their new customers.


When a homeowner refinances their existing mortgage, they might also be able to access the equity they have built up in their home on top of the currently remaining loan balance. Home equity is the portion of your home’s value that you own outright. You can calculate your equity by figuring out the difference between your property’s current value and the remaining loan balance. Each bank has a slightly different approach towards the equity release in terms of proof of how you intend to use that money or the maximum accessible equity amount. Generally, many banks will have a maximum loan-to-value (LVR) ratio to which they’re prepared to lend. This is often 80% without the lender's mortgage insurance (LMI). Since everyone’s home loan, property and financial circumstances are different, the amount of equity you’ll be able to get out will vary.


If you have enough equity in your home and you’re in a strong financial position, you can consider refinancing with access to your built up equity for the following reasons:

  • you want to pay the deposit on an investment property but don’t have the money saved and you want flexibility to have the funds available should you see a property you want to purchase

  • you want to diversify and invest in shares. The money you borrow by cashing out will usually come with a lower interest rate than an unsecured loan

  • you want to carry out renovations to improve your lifestyle and increase the value of your home

  • you’re using the money to pay off money you owe on other assets and consolidate all your debt into one low interest rate loan.

Having said that, it’s wise to be aware of the impact of increased loan repayments anytime you increase your loan to access equity. Also, before refinancing your home loan, find out whether refinancing could still be worthwhile and meet your best interest to serve your needs and objectives.


If you are considering accessing home equity or perhaps options to refinance, please don’t hesitate to reach out to Jenice Lee.



Jenice Lee at Finance Star is MFAA approved finance broker and is not your average mortgage broker.


Contact us if you want to find out more about how we can help with your finance options.

FINANCE STAR Credit Representative Number 529071 is authorized under Australian Credit Licence Number 389328.


This article provides general information only and has been prepared without taking into account your objectives, financial situation, or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax, or financial advice and you should always seek professional advice in relation to your individual circumstances.



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