What is Equity?

The equity in your home can be used to secure finance for a variety of things. It might be a home extension. An investment property. A new car or another big-ticket purchase.

Knowing how to use your equity effectively and making it work for you could be an invaluable wealth-building tool.

Let’s look at what equity is, how it grows and how you can access it.

Equity explained

Equity is the proportion of your property that you actually own. In other words, it’s the difference between the market value of your property and your loan balance.  

Let’s say your property’s market value is $400,000 and you owe the lender $220,000. Your total equity is $180,000. 

Then there’s your useable equity. Banks will typically lend you 80% of the value of your home, minus what you owe on it.

In the scenario above, your useable equity would be the value of your property at 80%, $320,000, minus your mortgage of $220,000 = $100,000.

In some instances, you may be able to borrow more if you take out Lenders’ Mortgage Insurance.

How does equity grow?

The property’s value increases

If your property goes up in value, so too will your equity.

  • To help ensure your property appreciates in value:
  • Spend plenty of time researching the area and the property (talk to us if you need guidance in researching the area/property).
  • Look for areas experiencing economic growth. More jobs mean more people will be moving there and there will be higher demand for housing.  
  • Ensure the property is close to amenities like public transport, schools and shops. 
  • Investigate any zoning changes or future developments that could affect your property’s value. 
  • Choose a property that will appeal to as many future buyers as possible. 
  • Consider renovating to drive up the property’s price tag.

Your debt decreases

Another way to grow your equity is to pay down your mortgage.

By decreasing the amount you owe the lender, the proportion of the property you own will increase.  

You can potentially help reduce your debt quicker by: 

  • Choosing a home loan that allows you to make extra repayments. 
  • Making repayments more often (weekly or fortnightly, rather than monthly). 
  • Opting for a shorter-term loan that could help you pay off your debt sooner. 
  • Using loan features such as offset accounts that may help you decrease the amount of interest you pay and aid you in building your equity

How can I access my equity?


If you need a large amount of money, for example, for a deposit for your next property, you may consider refinancing to unlock your equity.

This involves taking out a new loan to pay off your old mortgage, with some money left over – that is, your equity. 

To find out how much equity you have, your property will need to undergo a valuation. The bank will consider the property’s current market value, your income, expenses and debt levels when assessing your application.

Top-up your loan

Increasing or topping up your existing loan could allow you to unlock extra funds.

Your lender will consider the amount of equity in the property and your current financial circumstances when deciding whether you’re eligible for a top-up loan.  

Remember to budget for any increase in your repayments as a result of topping-up your loan.  

Other options 

If you need funds for smaller renovations, a line of credit may be the way to go.

Lines of credit allow you to access your equity up to an approved limit.

Other options like redraw facilities may also work for you. These give you the ability to access any additional repayments you’ve made on your loan above the minimum amount.  

Like to know more?

Equity is an extremely useful resource and it’s important to understand how you could be using yours to grow your wealth and achieve your lifestyle goals.

To get started, give us a call today to talk through how you can unlock your equity – we’re here to help!

Are you a first homebuyer looking for


We can help get you into your new home.

We’ve worked with clients across Australia to access the different first home owner grants (FHOG) as well as the various stamp duty and other concessions that may be available depending on which state you are in. We can talk you through your various options as well as helping you compare things like buying vacant land vs. an established home.

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A word from our satisfied customers

Maxine Zhong
Maxine Zhong
19 October 2023
Amanda has been such an incredible support throughout our very first time going through the home loan process. Her thoughtfulness to regularly check in to make sure all our questions were answered and that all our documents were in place helped to make the whole daunting process feel seamless and easy. I could not recommend her enough - she made sure to keep us informed every step of the way and made sure all necessary documents/processes were completed well ahead of time so we never had to worry about missing any steps. She went well above and beyond her role, and I know we will definitely be coming back to her in the future, as well as recommending her to all of our networks! Thank you again, Amanda!
Mark Nesbitt
Mark Nesbitt
11 October 2023
Greg and the team provide an outstanding service. Highly recommended
Christine Tran
Christine Tran
23 September 2023
Yuval handled my first ever home loan, he did such an amazing job I asked to him to refinance for me 2 years later. Yuval made everything very easy for me, and will give his best recommendation as if it was his own. Would always recommend Yuval :)
David Petrini
David Petrini
25 August 2023
Yuval Bloomfield was an absolute delight to work with. He made it extremely easy for my clients to discuss about their financial situation. With Yuval's strong connections he was able to get the loan my clients wanted in very quick time. Will definitely refer Yuval again.
Sophie Linehan
Sophie Linehan
24 August 2023
Greg and the team at 1st Street were fantastic all the way through the process of getting our financing sorted and buying a new home. They not only secured us the most competitive mortgage in the market but they also gave advice on a number of mortgage-adjacent questions that came up along the way. Their responsive and thoughtful guidance helped make the nail-biting process clear and calm. We would definitely recommend their services.
Gabrielle Scott-Jones
Gabrielle Scott-Jones
18 August 2023
Greg and his team gave me exceptional advice and support. They were timely and detailed in their responses and dealt patiently with me as a first home buyer and all of my questions. The lender at the bank commented on how well I was being looked after compared with other brokers in the market. I’d highly recommend 1st Street to anyone, including friends and family.
Eli Simic
Eli Simic
15 August 2023
Great communication and fast service
Richard Kuipers
Richard Kuipers
11 August 2023
Jeremy and his team are superb. Negotiated the best deal for us and were an absolure pleasure to work with. Highly recommended, you can't do any better in my opinion.
Jordan Rivkin
Jordan Rivkin
1 August 2023
The team at 1st Street truly are professionals. I can't recommend Jeremy highly enough, he is extremely competent and just a great guy. You're in safe hands with 1st Street!
Yossi Bengida
Yossi Bengida
23 July 2023
Another amazing job by David and Bree. Always available for our questions, helpful and just 10/10 Seriously good work !! See you on the next one :) Yossi and liz