Can a Broker Help Me Access Equity in My Property in Victoria and What Is Equity Release?

By Lowest Interest Rates Australia

Introduction

When I first heard the term equity release, I thought it sounded like something out of a finance textbook — complicated, technical, and maybe a bit intimidating. But when my mortgage broker explained it over coffee, it suddenly made sense. “It’s basically your property paying you back,” they said. And honestly? That’s exactly what it is!

Equity release is one of those hidden gems of home ownership that many Victorians don’t fully understand or take advantage of. Whether you’re dreaming of a renovation, planning an investment, or just want to get on top of debts, tapping into your home’s equity can open up financial possibilities you didn’t know you had.

In this guide, I’ll break down what equity release really means, how it works, and how a mortgage broker can help you unlock it safely and strategically — especially if you’re a homeowner in Victoria.

Table of Contents

1. What Is Equity in a Property?
2. What Is Equity Release?
3. How Does Equity Release Work in Victoria?
4. Why Homeowners Use Equity Release
5. How a Mortgage Broker Helps You Access Equity
6. How Much Equity Can You Access?
7. Case Study: How a Melbourne Homeowner Used Equity to Invest
8. Risks and Considerations of Releasing Equity
9. Tips for Using Your Equity Wisely
10. Final Thoughts – Work with Lowest Interest Rates

What Is Equity in a Property?

Before we talk about releasing equity, let’s cover what equity actually is. Simply put, equity is the difference between your property’s current market value and how much you still owe on your home loan.

Here’s the formula:

Equity = Property Value – Outstanding Loan Balance

For example, if your home in Melbourne is worth $900,000 and you still owe $400,000 on your mortgage, your equity is $500,000. That $500,000 represents your ownership stake in the property — and it’s a powerful financial resource you can potentially tap into.

What Is Equity Release?

Equity release (sometimes called a “cash-out refinance”) means using that ownership portion of your property to access funds. In practical terms, it involves borrowing against the value of your home — without having to sell it.

When you release equity, you’re essentially increasing your home loan amount, with the extra funds paid to you as cash or used for a specific purpose. It’s like unlocking the wealth tied up in your bricks and mortar.

For example:

• Your home is valued at $800,000.
• Your mortgage is $400,000.
• You refinance to $600,000.

The difference — $200,000 — is the equity you’ve released, which you can use for other financial goals.

How Does Equity Release Work in Victoria?

In Victoria, equity release typically happens through refinancing. That means replacing your existing home loan with a new one — either with your current lender or a new one — for a higher amount.

Here’s how it usually works step by step:

1. Property Valuation: The lender orders a valuation to determine your home’s current market value.
2. Equity Assessment: The lender calculates your available equity and how much of it you can safely access (usually up to 80% of your home’s value).
3. Loan Application: Your broker helps you apply for a refinance with the right structure and loan features.
4. Approval and Settlement: Once approved, your new loan is set up, your old loan is paid out, and you receive your equity funds.

It’s a straightforward process — especially when handled by a broker who knows which lenders move fastest and offer the most flexibility.

Why Homeowners Use Equity Release

There are many reasons Victorians choose to release equity. Some of the most common include:

• 🏡 Renovations: Modernising your home or adding value through improvements.
• 💼 Property investment: Using equity as a deposit for another property.
• 💰 Debt consolidation: Paying off high-interest debts like credit cards or personal loans.
• 🎓 Education or family support: Funding school fees or helping children buy their first home.
• 🌏 Life goals: Travel, business investments, or lifestyle upgrades.

The beauty of equity release is that it lets your property work for you — turning static value into an active financial tool.

How a Mortgage Broker Helps You Access Equity

While you can technically apply for equity release directly with your bank, using a broker in Victoria makes the process faster, smarter, and usually more profitable.

Here’s how a broker helps:

• Assessing your situation: Brokers calculate how much equity you can safely release and how it will affect your repayments.
• Comparing lenders: They compare dozens of banks and non-bank lenders to find the best rate and structure for your needs.
• Handling paperwork: They take care of the refinancing application, valuation, and communication with lenders.
• Strategic advice: A good broker ensures you’re not over-borrowing and helps align your loan structure with your financial goals (like investing or debt reduction).
• Ongoing support: They monitor rates and periodically review your loan to keep it competitive.

In short, a mortgage broker acts as your equity release partner — managing the legwork and helping you avoid common traps, like taking on too much debt or choosing a restrictive lender.

How Much Equity Can You Access?

Most lenders in Victoria will allow you to borrow up to **80% of your property’s market value** without needing to pay Lenders Mortgage Insurance (LMI).

Here’s an example:

• Your home value: $1,000,000
• 80% of value: $800,000
• Current loan: $500,000
• Available equity to release: $300,000

If you want to borrow above 80% (say, 85% or 90%), it’s possible — but you’ll usually need to pay LMI, which can cost thousands. Brokers help you weigh whether that’s worth it or if it’s better to stay under the 80% threshold.

They’ll also make sure you don’t accidentally release “too much,” leaving yourself financially exposed if rates rise or property values dip.

Case Study: How a Melbourne Homeowner Used Equity to Invest

Let’s look at Tom and Lisa from Bentleigh. They bought their home in 2016 for $700,000, with a $560,000 mortgage. Fast forward to 2025, and their property is now worth $1.1 million, with $400,000 left on their loan.

They wanted to invest in a second property but didn’t have enough cash for a deposit. Their broker at Lowest Interest Rates helped them calculate their available equity:

• Property value: $1,100,000
• 80% of value: $880,000
• Current loan: $400,000
• Equity available: $480,000

The broker helped them release $200,000 in equity to use as a 20% deposit for an investment unit in Geelong. Within four weeks, their refinance settled, their new property was under contract, and their rental income covered most of the new mortgage repayments.

They didn’t have to touch their savings — their home’s value worked for them instead.

Risks and Considerations of Releasing Equity

While equity release is an excellent financial tool, it’s not without risks. You’re increasing your loan amount, which means higher repayments and more interest over time. Here’s what to keep in mind:

• Higher repayments: Borrowing more increases your monthly costs unless you extend your loan term.
• Property market risk: If property values fall, your equity position can shrink — a risk known as “negative equity.”
• Over-borrowing: It’s tempting to access all available funds, but that can limit your future borrowing power.
• Purpose clarity: Always have a clear, productive reason for accessing equity — not just to fund short-term spending.

A skilled broker helps you balance ambition with caution — making sure you use your equity strategically, not impulsively.

Tips for Using Your Equity Wisely

Here’s how to make the most of your equity release:

• 💡 Use it for growth: Invest in assets or renovations that increase long-term wealth.
• 📉 Avoid high-interest debt: Don’t use equity for short-term liabilities like holidays or cars unless absolutely necessary.
• 📊 Keep track of your LVR: Stay below 80% to avoid paying LMI.
• 📋 Review your loan regularly: Ask your broker for annual reviews to ensure your rate stays competitive.
• 🧾 Talk to an accountant: Especially if using equity for investment — they’ll help structure your debt tax-efficiently.

Using equity wisely can set you up for financial freedom. Using it recklessly can do the opposite — so having professional guidance makes all the difference.

Final Thoughts – Work with Lowest Interest Rates

Accessing your home’s equity can be one of the smartest financial moves you’ll ever make — if you do it with a plan. It can unlock opportunities to invest, renovate, or simply take control of your finances, all without selling your home.

At Lowest Interest Rates, our expert Melbourne brokers specialise in helping homeowners across Victoria understand and access their equity safely. We’ll calculate your available equity, compare the best refinance options, and handle all the paperwork — so you can focus on putting your equity to work.

🏠 Thinking about accessing equity in your property? Visit LowestInterestRates.com.au today to speak with a friendly broker who can show you how to release equity, refinance smarter, and reach your goals faster.