How Much Equity Do I Have in My Home?

Your home equity is the difference between your property's current market value and what you owe on your mortgage.

For homeowners in Edens Landing considering a refinance home loan, this figure determines what options are available. If your property is worth $550,000 and you owe $380,000, you have $170,000 in equity. Lenders typically allow you to access up to 80% of your property value, which means you could potentially borrow up to $440,000 before needing to pay lenders mortgage insurance. After deducting your existing loan amount, that leaves roughly $60,000 in usable equity.

Calculating Your Available Equity

Your available equity is calculated by taking 80% of your property's current value, then subtracting your outstanding loan balance.

Consider a homeowner in Edens Landing who purchased near Grand Plaza Shopping Centre five years ago for $420,000 with a 10% deposit. They borrowed $378,000, and their loan balance has reduced to $350,000. The property has increased in value to $520,000 during that period. At 80% of the current value, the maximum borrowing capacity is $416,000. Subtracting the existing loan of $350,000 leaves $66,000 in accessible equity. This calculation determines whether refinancing to access equity makes sense, or whether the focus should be on securing a lower interest rate instead.

Lenders will arrange a property valuation during the refinance application to confirm your home's current worth. Market values in Edens Landing have seen varied movement depending on property type and proximity to amenities like schools and the Logan Motorway.

Why Equity Matters When You Refinance

The amount of equity you hold affects both the loan products available and the interest rates you can access.

Borrowers with more than 20% equity avoid paying lenders mortgage insurance, which immediately expands their options. Higher equity also positions you to negotiate lower interest rates, as you represent lower risk to the lender. When we conduct a loan health check for homeowners in Edens Landing, equity position is one of the first factors we review. Those coming off a fixed rate period often find their equity has grown substantially, putting them in a stronger position than when they first purchased. This changed equity position can unlock offset accounts, redraw facilities, or lower rates that weren't available on their original loan.

Some households use refinancing purely to move to a variable interest rate with an offset account, allowing them to reduce interest paid without formally accessing equity. Others refinance to consolidate into their mortgage, using built-up equity to clear high-interest debts and improve monthly cashflow.

When Property Values Drop

If your property value has declined or remained flat since purchase, refinancing becomes more complex but not impossible.

Homeowners who bought near the market peak may find their equity position hasn't improved as expected. In a scenario where someone purchased in Edens Landing for $480,000 with a 10% deposit, borrowing $432,000, and the property is now valued at $470,000, their loan balance may have only reduced to $415,000. This leaves just $55,000 in total equity, or roughly 12% of the property's value. While this doesn't provide accessible equity for a cash out refinance, it still allows refinancing to a lower rate. The homeowner won't be accessing funds, but they can potentially reduce their interest rate and save on ongoing loan costs. Lenders will still assess the application, but the loan amount remains similar to the existing balance.

Homeowners in Edens Landing with lower equity positions benefit from reviewing their loan structure regularly. Even without accessing funds, switching from a high variable rate to a more competitive product can save thousands over the life of the loan.

Using Equity for Investment Property

Accessing equity to purchase an investment property is one of the most common reasons homeowners in Edens Landing refinance.

Lenders allow you to borrow against your home equity while maintaining your existing property. If you have $80,000 in accessible equity, you could use this as a deposit on an investment property, potentially valued up to $400,000 with a 20% deposit. The equity release is structured as part of your home loan refinance, increasing your loan amount to unlock the funds. Your original property remains your security, and the investment property is purchased under a separate loan structure. This approach allows homeowners to build a property portfolio without needing to save another deposit from scratch.

Refinancing to release equity requires careful planning around serviceability. Your income needs to support both the increased home loan and the new investment loan, even if the investment property generates rental income. Lenders assess your capacity based on current circumstances, so reviewing your borrowing capacity before committing to a refinance application is critical.

Fixed Rate Expiry and Equity Growth

Homeowners coming off a fixed rate period often discover they have more equity than expected, creating refinancing opportunities.

Many borrowers who locked in rates several years ago have benefited from property value growth and loan balance reduction during the fixed period. When the fixed rate expires, it's the right time to reassess your equity position and determine whether your current lender offers competitive variable rates or whether moving to another lender makes sense. Some households remain stuck on high rates simply because they haven't reviewed their loan structure since the fixed term began. A loan review at the point of fixed rate expiry reveals both your equity position and whether alternative loan products deliver lower costs or improved features.

Homeowners in suburbs like Edens Landing, located within the broader Logan City Council area, often see equity growth driven by infrastructure development and demand for affordable housing close to employment centres.

Preparing Your Refinance Application

Once you understand your equity position, the refinance process involves gathering supporting documents and confirming your serviceability.

Lenders require recent payslips, tax returns if you're self-employed, and statements showing your current loan balance. They'll assess your income, existing debts, and living expenses to determine whether you can service the proposed loan amount. If you're refinancing to access equity, lenders want to know how the funds will be used. Whether it's for renovations, debt consolidation, or investment purposes, the intended use affects their assessment. Working through the refinance application with a mortgage broker in Edens Landing streamlines the process, as they can identify lenders likely to approve based on your circumstances and equity position.

Understanding how much equity you hold transforms refinancing from a vague possibility into a concrete strategy. Whether you're unlocking funds, reducing your rate, or preparing for your next investment, your equity position shapes every decision.

Call one of our team or book an appointment at a time that works for you to review your equity position and explore your refinancing options.

Frequently Asked Questions