Has your property increased in value? Here’s how you could use equity to renovate your home!
According to recent research, over one in three Aussie home owners are considering selling their home. And a whopping 87% of these people plan on making a few improvements – like a kitchen or bathroom upgrade, prior to putting their place on the market.
For plenty of other home owners, renovations are a chance to get their home into tip top shape, create extra space for a growing family, or complete much-needed updates.
If a renovation is on your radar, it’s worth exploring all the options available to fund the project.
One of those options could be tapping into the equity you have in your home. And, with property prices increasing, you may have more equity than you realise.
Here's how it works.
First, let’s cut through the jargon. What actually is equity?
Home equity is the difference between your home’s current market value and the balance left owing on your home loan.
Can rising property values impact how much equity I could access?
You bet! The property market is booming, and chances are you could be pleasantly surprised by how much equity you have.
Home prices have continued their recent surge, rising more than 20 per cent over the past year in the biggest annual boom since 1989. Regional areas continued to lead cities, with prices up 1.7 per cent over the past month and 23.1 per cent over the last year. That means your home is likely to be worth more now than when you purchased it.
In fact, your property could be worth considerably more if you’ve held the same home for several years. That’s great news for your home equity!
Refinancing can unlock the equity in your home
There is a way to access home equity that doesn’t involve selling up.
Refinancing your mortgage can be a way to tap into equity, taking out a new loan for the amount you wish to borrow. Added bonus: You may be able to switch to a lower rate and save.
Weigh up all your options
In addition to refinancing, other options are available to help with the cost of a renovation project. What’s best for you depends on your own situation.
For instance, you may be able to use the funds available through a home loan redraw, or a personal loan, or maybe apply for a cash-out release on your existing property?
It also pays to consider the type of renovation you're planning. For major structural projects like a second storey extension, a construction loan can be a useful option.
We’re here to help you make better choices for you!
The key take-out is that renovating doesn’t have to mean dipping into precious cash savings. There is a range of funding choices available that can let you bring out the best in your home, without leaving your savings worse for wear.
Expert advice could make all the difference when it comes to financing your renovations – and the best part is we do all the legwork for you when it comes to exploring the funding options that are available based on your personal needs.