By now, you’re well aware that property prices increased by 23.7% in 2021. This was a significant increase, and while it provides a massive opportunity for those considering selling their home, what does it mean for you if you aren’t?
One way to take advantage of the increase is to cash out on your equity while your home value is high. And according to recent NAB research, three in 10 mortgage holders have done just. Popular uses of the equity have been for renovations of their primary property, buying an investment property, boosting super and even investing in shares.
How equity works
Equity is not as complicated as you think. We’ve shared a scenario below, however, if you would like more information for us to take a look at your scenario, we’re most happy to sit down with you and see how much equity you can take advantage of. And the best thing of all is we can help you refinance too!
Let’s say you bought a house several years ago for $750,000, and due to the increase, it is now valued at $1 million. Let’s pretend you paid $250,000 on it, leaving you with $500,000 outstanding on the loan. By refinancing your home loan, you could unlock the equity of up to 80% of your property’s new market value. This could be used for a healthy deposit to fund your investment property or for renovations.
While interest rates are rising, it doesn’t mean there aren’t any options available for you to leverage the house increase now before it reduces.
Would you like to know how much equity you could unlock in your home?
If exploring and unlocking the equity in your home to fund your next plan sounds interesting, then get in touch. With access to over 40+ lenders, there is always a solution to fund your dreams.
Disclaimer: The content of this article is general and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal, nor to imply any recommendation or opinion about a financial product. It does not consider your personal situation and may not be relevant to circumstances. Before taking action, consider your circumstances and seek professional advice. Increasing your home loan will not suit all circumstances. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.