Using your home equity

If you're already a homeowner

Your financial situation will most likely have changed since you took out your first home loan. You may have changed jobs, started your own business, bought a new car, and there may even be a few more mouths to feed at the dinner table. Depending on the age of your current home loan and the features you may have taken advantage of, you may have built some equity in your home, too.

What is equity?

Equity is the difference between the value of your current home and the amount still owing on it. So if your home is valued at $600,000, and you still owe $300,000 on your current home loan, the equity in your home is $300,000.

Using home equity to build your wealth

Your home equity generally grows over time.  This increase may be thanks to an increase in the property market, your dedication to repaying your loan by making additional repayments or a combination of these things. Equity in your home is valuable as it’s building your wealth. It can also be used to secure funding for a deposit on a new investment property. If you do this with Suncorp Bank, you can borrow up to 90% of the property value (inclusive of Lenders Mortgage Insurance). But keep in mind, if you borrow more than 80% of the property’s value, you’ll have to pay Lenders Mortgage Insurance.

Enquire online to speak to someone from our experienced team of home loan specialists.

Ways to build your home equity

Equity is something that will change and grow over time. But there are some simple things you can do as a home owner to increase the value of the equity in your home in the timeframe that suits you.

1. Renovations and home upgrades will add to the value of your home.

If you're savvy about the planning and budgeting that goes into a renovation project, you could reap the rewards of higher value in your home. Whatever renovations you may be considering, research is key to your success.

2. Make your repayments regularly

It may sound simple, but keeping regular or even increased repayments is the best way to reduce your loan balance and grow your equity. Use the Suncorp Bank loan repayments calculator to work out how much you could save through different repayment scenarios and timeframes. But make sure you check whether your loan allows you to make extra repayments or whether this will incur a further cost. 

3. Use a lump sum payment

If you've got access to a lump sum payment you might be tempted to splurge on a holiday or new car. But another option is for you to use this as a lump sum payment towards your home loan. Speak to your Home Loan Specialist to confirm whether this is an option that's suitable.