Understanding equity

The goal of any homeowner should be equity.  Equity is the difference between the market value of your home and the balance remaining on your loan. For example, if you have a property worth $500,000 and there is $300,000 left to pay on your mortgage, you have $200,000 in equity.

You can grow the equity in your home by making extra repayments on your loan or by the value of your home increasing.

Unlocking the equity in your home can assist with your next home purchase. It can also assist with the purchase of an investment property or you could use it for other purposes such as purchasing a car, going on a holiday or renovating your current home.

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