Use Equity To Purchase Your Next Property

Increase in Property Prices

According to REIWA property, prices in WA will continue to increase by 10% in 2022. For investors, it has never been a better time to review your property value and access the equity of your property for future investment such as shares, buying another investment property or upgrade your existing home.

How do you access your property’s equity?

In order to access your property’s equity, we need to identify the value of your property and the balance of your loan. Once that step is completed, you can access up to 90% equity of the value of your property minus the balance of your mortgage. It is recommended to only borrow up to 80% LVR to avoid mortgage insurance.

Example

Here is a live example of how we recently helped a client to do an equity release:

2017

In 2017, John purchased his own owner-occupied property for $430,000 and he borrowed up to 80% at $344,000.

2021

As his mortgage has reduced to $304,000 in 2021, we did a valuation on his house and found that it has increased in value by about 5% every year to $520,000.

Based on figures above we can increase his existing mortgage up to 80% of the new valuation of $520,000, which is $416,000 (workings below).

$520,000 x 80% = $416,000

Minus his existing balance of the loan of $304,000 we are able to access an equity of $112,000 (workings below).

$416,000 – $304,000 = $112,000

John now can use his equity of $112,000 to invest in shares or deposit for a new property, renovation or debt consolidation.

Hope you guys enjoyed this simple informative article, if you need more information on how you can do the same give us a call on 0433 068 970 as our consultations are always free.

So call us today and see how much equity you can access from your property today!