Did you know your biggest financial asset might be the roof over your head?
As property prices in Brisbane and across Australia have risen over the last few years, many homeowners are sitting on a “goldmine” of equity. Yet, for many, this wealth remains locked away in their walls.
A Home Equity Loan (or equity release) allows you to access that cash without selling your home. It is a powerful tool for funding a renovation, buying an investment property, or consolidating debt—if used correctly.
In this guide, the team at Hunter Galloway explains exactly how home equity works, how to calculate your “usable” cash, and the smartest ways to access it in 2026.
What is Home Equity?
Simply put, equity is the difference between your property’s current market value and the amount you still owe the bank.
As you pay down your mortgage—and as your property value increases over time—your equity grows.
The Difference Between “Total Equity” and “Usable Equity”
This is the most common confusion we see. Just because you have equity doesn’t mean the bank will lend you all of it. Banks generally lend up to 80% of the property value to keep your loan healthy and avoid Lenders Mortgage Insurance (LMI).
We call this your Usable Equity.
How to Calculate Your Usable Equity
The formula to work out how much cash you can release is:
Example:
Imagine you own a home in Brisbane worth $800,000, and you owe $400,000 on your mortgage.
- Calculate 80% of value: $800,000 x 0.80 = $640,000
- Subtract current debt: $640,000 – $400,000 = $240,000
In this scenario, you have $240,000 of usable equity available to borrow.
Check your numbers now: want to do the math quickly? Try our free Home Equity Calculator to see how much you could access.
How Do You Access Your Equity?
In Australia, you don’t typically get a “second mortgage” from a different bank. Instead, you access equity through your current lender (or by refinancing to a new one) using one of two methods:
1. The “Top Up” (Cash Out)
This is the most common method for our clients. We simply increase your existing home loan limit or create a separate “split” loan for the equity amount.
How it works: You receive the equity as a lump sum payment into your bank account.
Interest: You pay interest on the full amount immediately.
Best for: One-off costs like paying a builder for a renovation, a deposit on an investment property, or buying a new car.
2. Line of Credit (LOC)
A Line of Credit works like a giant credit card secured by your house. You are approved for a limit (e.g., $100k) but you don’t have to draw it all down at once.
How it works: You have a facility you can draw from at any time.
Interest: You only pay interest on the funds you have actually used, not the full limit.
Best for: Investors who need a “war chest” ready for opportunities, or cosmetic renovations where you pay tradespeople gradually over time.
Warning: Interest rates on Lines of Credit are often higher than standard home loans.
3 Smart Ways to Use Your Home Equity
Once you unlock this capital, what can you do with it? Here are the three most common strategies we see at Hunter Galloway.
1. Buying an Investment Property
Many Australians use the equity in their own home to pay for the deposit and stamp duty on an investment property. This allows you to enter the investment market without needing to save a cash deposit from scratch.
Read More: How to Use Equity to Buy a Second Property
2. Renovating Your Home
Whether it’s a new kitchen, a pool, or adding a second story, reinvesting equity back into your property can be a smart move. Not only do you get a better lifestyle, but smart renovations can further increase the value of your home.
Note: Using home equity is often significantly cheaper than using a personal loan or credit card to fund renovations.
3. Debt Consolidation
If you have high-interest debts (like credit cards at 20% or car loans at 12%), you can refinance them into your home loan rate (typically much lower).
The Trap: While the interest rate is lower, stretching a short-term debt over a 30-year mortgage term can cost you more in the long run. We recommend making extra repayments to pay off this portion of the debt quickly.
Tax Tip: The Australian Taxation Office (ATO) states that the tax deductibility of a loan is determined by the purpose of the funds, not the security. If you pull equity out to buy income-producing shares or property, that interest may be tax-deductible. If you use it for a holiday, it is not. Always speak to your accountant.
The Hunter Galloway Process: How to Release Equity
Accessing your equity isn’t as simple as pressing a button—the bank needs to verify your income and the value of your home. Here is how we help you do it:
- Free Assessment: We review your current financial position and calculate your borrowing power.
- Property Valuation: We order an upfront valuation of your property to see exactly what it is worth in the current market. (We can often get this done for free).
- Lender Comparison: We look at your current bank’s offer and compare it against 30+ other lenders. Sometimes, switching lenders can get you a higher valuation or a lower interest rate, releasing more cash.
- Approval & Settlement: We handle the paperwork. Once approved, the funds are deposited into your account (or offset account), ready to use.
Frequently Asked Questions (FAQ)
Does accessing equity increase my repayments?
Yes. Because you are borrowing more money, your repayments will increase. However, if you use the funds to buy an investment property, the rental income may help cover these costs.
Can I use home equity for a holiday or a car?
Yes, you can use equity for personal purposes (“Cash Out”). However, be mindful that you are securing a depreciating asset (like a car) or an experience (a holiday) against your home.
How long does the process take?
A simple “Top Up” with your current lender can take 1–2 weeks. If we are refinancing you to a new lender to get a better deal, the process typically takes 3–4 weeks.
Do I need a lawyer?
Usually, no. If you are just topping up your loan, there is rarely a need for a conveyancer or solicitor.
Ready to unlock your home’s potential?
If you want to know exactly how much equity you have available and the monthly cost of releasing it, our team is here to help.
We help homeowners in Brisbane and across Australia structure their loans to build wealth safely.
Book a Free Strategy Session with Hunter Galloway or call us on 1300 088 065.
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