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What is equity?

Equity is the difference between what your home is worth today and how much you currently owe on it. For example, if your home is currently valued at $400,000 and you owe $150,000, you have $250,000 in equity. Your equity may support further borrowings, dependent on your circumstances.

Typically, many lenders allow you to borrow 80% of the value of your home without mortgage insurance. In this example, 80% of the property value is $320,000. Subtracting what is currently owed, $150,000 from the 80% of the property value $320,000 leaves $170,000 potentially available to go towards your investment purchase.

You may be able to borrow more than 80% of your home value. However, you will need to  consider mortgage insurance and if you can service the loan. Our loan consultants who can assist you in calculating how much you can potentially borrow, prior to you committing to a project. Call 13 63 73 option 4.

Non-investment purchases

Use your equity for non-investment purchases

If you don't want to wait to save enough money for renovations to your home, you can start sooner by unlocking your home equity. Whether you want to extend the family home, renovate or buy items such as a caravan or boat, accessing your equity allows you to enjoy your hard-earned money.

Our Equity Loan Package is a line of credit facility that gives you the convenience and flexibility to access available equity in your property (up to an agreed limit) as accessible funds. You can use these funds at any time and any principle repaid is also available to be redrawn.

With our Equity Loan Package, you can choose to pay your salary or other income directly into your loan account to reduce the overall interest paid and you can draw as little or as much as you like at any time (up to the approval limit). Note our equity loans require an interest only payment be deducted each month from a linked transaction or savings account.

Case study

Case study: Accessing equity to improve your lifestyle

Jason and Evelyn are looking to extend their family home and buy a second car. Their home is worth $600,000 with an existing mortgage of $200,000 and they have the income to service a total debt of $480,000.

Jason and Evelyn are looking for a flexible home loan which allows them to access their equity whenever they want and only pay interest on the funds they use.

Our Equity Loan Package is a line of credit facility allowing Jason and Evelyn to access their equity at any time. It's an all-in-one account combining loan, savings and everyday transactions into one convenient package. They only pay interest on the funds they use and by saving direct into their loan account, they are helping to reduce the loan amount and save on interest.

Example: Equity Loan Package

case study 

Our Equity Loan Package provides Jason and Evelyn with the flexibility to use their equity when they want, without having to apply for additional loans. They also have the ability to increase their total credit limit, if required (subject to lending approval).

Any advice has been prepared without taking account of your objectives, financial situation or needs. BankVic cannot provide tax advice. Before acting on the advice you should consider whether the advice is appropriate for you. Investment and taxation advice should be sought from an experienced adviser. Our financial planners may be able to assist with investment advice. Before you make any decision to acquire any product or service you should obtain and consider the relevant Product Disclosure Statement available on our website, at a branch or by calling 13 63 73. As an AFSL holder, BankVic sells general insurance products under an agreement with CGU Insurance Limited ABN 27 004 478 371 AFSL 238291. Terms, conditions, limits and exclusions apply. If you purchase insurance we will receive a commission that is a percentage of the premium. Fees and charges apply. Interest rates are variable and subject to change. Information on our terms & conditions, interest rates and fees & charges are available on request.

BSB: 704-230

Police Financial Services Limited - ABN 33 087 651 661
AFSL 240293 Australian Credit Licence 240293
General Enquiries 13 63 73
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