Home Equity: How to Access and Use It

By Jason Given - June 2026 - 7 min read

What is home equity?

Home equity is the portion of your property that you actually own - the difference between its current market value and the amount you still owe on your mortgage. Every repayment you make and every dollar your property increases in value adds to your equity.

For many Australians, the equity in their home is their single largest financial asset. And unlike savings in a bank account, equity can be put to work - for renovations, investing, consolidating debt, or helping family members get into the market.

How to calculate your usable equity

Your total equity is simple: property value minus loan balance. But the amount you can actually access is different. Most lenders will let you borrow up to 80% of your property's value without requiring Lenders Mortgage Insurance (LMI). So the formula for usable equity is:

Usable equity = (Property value x 0.80) - Current loan balance

For example, if your home is worth $750,000 and you owe $350,000, your usable equity is ($750,000 x 0.80) - $350,000 = $250,000. That is the amount a lender would typically let you access.

Ways to access your equity

• 1.Top-up your existing loan - increase your current mortgage by the amount you want to access. This is the simplest option if you are happy with your current lender and rate
• 2.Refinance to a new lender - move your loan and access equity at the same time. This often results in a better rate, which can offset the higher loan amount
• 3.Set up a separate split or line of credit - keep your existing loan untouched and create a new facility secured against your property. This is useful if you want to keep the funds separate for tax purposes, particularly if using equity for investment

Common uses for home equity

Renovations: Using equity to fund home improvements can add more value than it costs, effectively growing your equity further. Kitchen and bathroom renovations, extensions, and landscaping typically deliver the best return.

Investment property deposit: One of the most common uses. Your equity serves as the deposit for a second property, allowing you to grow your portfolio without needing to save a separate deposit. Lendology structures these to keep the investment loan separate for tax deductibility.

Debt consolidation: Replacing high-interest personal loans, car loans, or credit card debt with equity drawn at your home loan rate can significantly reduce your total interest cost. The trade-off is that you are converting short-term debt into long-term debt, so you need to be disciplined about paying it down faster.

Helping family: Some parents use equity to act as guarantor for their children's first home purchase, or to gift funds toward a deposit. This is a growing trend in Adelaide as property prices rise.

Things to consider

Accessing equity increases your loan balance and your repayments. Make sure the purpose justifies the cost. Using equity for an appreciating asset (property, renovations) is generally sound. Using it for a depreciating asset (car, holiday) is riskier.

If you are using equity for investment purposes, keep the loan split separate from your owner-occupied loan. This preserves the tax deductibility of the investment portion and keeps your accounting clean.

The valuation your lender uses may differ from what you expect. Lenders use conservative valuations, particularly in a flat or declining market. Lendology can give you a realistic estimate before you commit to any plan.