How to Use the Equity in Your Home: Renovate, Invest or Supercharge Your Finances
Property price surge? Here’s how to make the most of it
In 2021, Australian property prices soared an eye-watering 23.7%—a remarkable boost that left many homeowners with more equity than ever before. But what does that actually mean for you?
Well, you might not need to sell your home to take advantage. Instead, savvy Aussies are unlocking equity to fund everything from renovations to investment properties.
What are homeowners doing with their equity?
According to NAB research, seven in 10 mortgage holders have recently tapped into their home equity to:
- Renovate their home
- Purchase an investment property
- Invest in the share market
- Top up their superannuation
At CBM Mortgages, we’re seeing more and more homeowners in Sydney explore these same opportunities. Read more on our construction loan page here
How does unlocking home equity actually work?
Let’s break it down with a quick example:
Say you bought a home in Sydney three years ago for $800,000. Thanks to the property price surge, it’s now valued at $1 million. If your original loan was $600,000 and you’ve paid it down to $500,000—nice work, by the way—you now have $500,000 in equity.
Borrowing against your equity
Most lenders will let you borrow up to 80% of your home’s current market value without needing Lenders Mortgage Insurance (LMI). So:
- 80% of $1,000,000 is $800,000
- You owe $500,000
- That leaves $300,000 in usable equity
You could refinance to increase your loan to $700,000 or $800,000—giving you $200,000 to $300,000 in cash-out equity to work with.
Sounds appealing? Let’s explore your numbers together. Read more in our blog on borrowing capacity here
What can you do with unlocked equity?
1. Renovate your home
Dreaming of a new kitchen, outdoor entertaining area, or energy-efficient upgrades? Renovating with equity can increase your home’s value and improve your lifestyle.
Need inspiration? Check out NSW Planning’s Renovation Guidelines.
2. Buy an investment property
Use equity as a deposit on a second property and start generating rental income. It’s a common strategy among clients looking to build long-term wealth.
We can help you get pre-approved and estimate your borrowing power—learn more in our investment blog post here
3. Invest in shares or boost your super
Putting your equity into shares or superannuation can diversify your financial future. Just be sure to seek tailored financial advice—try Moneysmart for unbiased resources.
Is refinancing a smart move?
Absolutely—especially if it secures a sharper interest rate. Even in a rising rate environment, lender competition remains strong, particularly if:
- You have a solid equity position
- You’ve been meeting mortgage repayments reliably
- You want to consolidate debt or restructure finances
We’ll compare lenders and find a solution that suits your goals. And yes, we’ll handle the paperwork. Get started here.
Let’s tap into your equity potential
Unlocking equity can be a game-changer—but only if done wisely. At CBM Mortgages, we crunch the numbers, explain your options, and help you make informed decisions about your home and financial future.
Reach out today for a friendly, obligation-free chat. We’ll help you turn yesterday’s property gains into tomorrow’s possibilities.
Disclaimer: This article is general in nature and does not constitute financial or legal advice. Please consider your personal circumstances and seek appropriate guidance before making financial decisions.
Written by Craig McDonald 16/06/2025
