Equity Release
Equity Release is the process of accessing the equity in a property — the difference between its current market value and the outstanding loan balance — without selling the asset. This is typically done through refinancing, a Cash Out Refinance, or by establishing a new loan facility such as a line of credit secured against the property.
Why It Matters
For Australian property owners, equity is often their largest untapped asset. Equity Release allows borrowers to convert that value into working capital for business investment, property purchases, renovations, or debt consolidation — all while retaining ownership. It's an especially powerful tool for self-employed borrowers who can access it through alt doc or low doc pathways without full financial statements.
How It Works
- Your property is valued to determine current market value.
- Available equity is calculated: market value minus outstanding loan balance.
- The lender determines how much equity can be released based on LVR limits (typically up to 80%).
- Servicing is assessed on the total new loan amount.
- Funds are released via refinance settlement or a new line of credit facility.
Common Use Cases
- Using home equity as a deposit for an investment property
- Funding a business expansion, fit-out, or stock purchase via business finance
- Renovating an existing property to increase its value
- Consolidating high-interest unsecured business loans or overdraft debts
- Establishing a line of credit facility for flexible access to capital
Related Switchboard Resources
For general information on accessing equity in your property, visit moneysmart.gov.au.