If you’ve paid off a good part of your home loan or your property’s value has increased, you may have a whole lot of equity you can access. The question is: would it be worth unlocking this equity to build even bigger opportunities?


Equity is the difference between the market value of your property and the amount you still owe on your home loan.

It’s important to understand the difference between equity and useable equity. You can’t use all of your available equity.

Useable equity

Banks will lend up to 80%, in most instances, on the value of your property provided you can meet the repayments. Useable equity is the difference between this amount and the existing lending you have against the property.

When speaking to your bank about what you can borrow against the useable equity you have, they may ask for your income, age, how many kids you have, your additional debts and a host of other factors. If you want to speak to someone more about this then feel free to contact one of NAB’s banking specialists to find out more, or use NAB’s home equity calculator to get a indicative guide to how much equity you may have available.


Increase the value of your property

A lot of people complete upgrades and renovations to their homes which could increase the market value of the property. Always consider how much you may need to borrow before taking on these options, due diligence could avoid overcapitalising.

Get a feel for what the price of a renovation could be by obtaining quotes and speaking to others in your local area who may have recently renovated. Doing this could uncover costs you may not have planned for or thought about. It could also help you work out what style and level of quality you want to achieve.

Making larger repayments or more frequent repayments

Reducing your loan balance could allow you to build useable equity. If possible make extra repayments or increase the amount or frequency of your repayments. NAB’s loan repayments calculator may be able to show you how much time and interest you could save by changing your repayments. You’ll need to check if this option is available on your current loan. Fixed rate loans may have economic costs for making changes to the loan or repayments prior to the expiry of the fixed rate period.

Make lump sum payments

If you’re lucky enough to come into a lump sum of money, why not put it straight into your home loan? Again, you'll need to check whether this option is available with your current loan.

Maximise the benefit of linking your transaction account to 100% Offset

Linking a eligible transaction account to a 100% offset facility will allow you to reduce the amount of interest you pay which could result in the saving of interest charge on your existing loan. This could allow you to build equity in your property faster than you think.


Renovate your home

Chances are your home may have increased in value since you bought it. You may have also reduced your loan balance over time. If your home needs a facelift and renovations are on the agenda, you may want to consider potentially unlocking the useable equity by borrowing more to make the changes you need.

To get an idea of how much useable equity you have, you can use NAB’s home equity calculator. Then talk to one of NAB’s banking specialists to work out what may work for you.

Invest the money

The equity you have in your home could unlock wealth creation opportunities. If your property has increased in value, the amount of equity that you could divert into investments could create wealth opportunities.

By unlocking this equity you could look to borrow against it to purchase investments that will increase your asset base. Investment properties and shares are common investment opportunities.

But above all, remember to play safe

Unlocking all your equity to invest will increase your level of risk. It’s always a good idea to consider how much lending you take on and the best way to ensure you have a plan in place is to speak to a financial planner.

Contact a financial adviser for more information unique to your situation to find out more.

Life events like buying a new car, taking a holiday or paying for education expenses can make a lot of people feel stressed about managing the costs

The equity you may have in your home could be another way to help smooth out the bumps that life can throw at you. By using the equity to help you borrow, you can set up a plan to pay the loan off over a longer period of time, reducing the impact of large one-off payments.

Line of credit loans can help to unlock your equity and allow you access to money for life events. Keep in mind, that the interest rate on lines of credit tends to be higher as you have no set repayment amount. However, you do need to cover the interest charged every month with the amount borrowed to be paid off at some point in the future.

Term loans are another possibility which you can discuss with your banker.


Always consider what the best solution is for your situation and be aware of what those commitments will mean to your lifestyle.

The information in this article should not be relied upon as financial advice as none of the information provided takes into account your personal objectives, financial situation or needs. NAB recommends you seek the counsel of an independent financial or legal adviser before making any investment or estate planning decisions.

(c) National Australia Bank Limited ABN 12 004 044 937, AFSL and Australian Credit Licence 230686.

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