WITH THE UFINANCIAL TEAM<\/p>\n
Australia’s housing market slowdown hasn’t stopped Aussies from taking advantage of their property growth.<\/p>\n
A recent survey published by one of the Big Four banks revealed many Aussies were unlocking their equity to get ahead.<\/p>\n
What can you use your home equity for?<\/p>\n
That’s where things get interesting.<\/p>\n
If you have been paying your loan for a few years, you may have built up reasonable equity. For example, if your property is worth $600,000 and the current debt on your loan is $290,000, your equity would be $310,000.<\/p>\n
You can borrow against your equity to purchase an investment property, for example. But not just that, you can also use your home equity to fund other big-ticket purchases, such as renovating your home or starting a new business.<\/p>\n
According to the above-mentioned survey:<\/p>\n
4 in 10 Aussies used their equity to make larger repayments on their loan or make a lump sum payment if available<\/p>\n
3 in 10 used their useable equity to renovate their homes, and<\/p>\n
16 per cent of homeowners unlocked their equity to buy an investment property, 12 per cent to invest in shares and 8 per cent to boost super balances.<\/p>\n
Understanding total equity and useable equity<\/p>\n
How much useable equity you’ll be able to use will vary between lenders. Still, as a rule of thumb, lenders will generally lend you only 80 per cent of the value of your home.<\/p>\n