Equity Home Loan Solutions in Sydney

Home Equity Loans: What They Are and How They Work

What is a home equity loan?

A home equity loan allows you to borrow money using the equity you've built in your property as security. Your equity is the difference between what your property is currently worth and what you still owe on your home loan. As you make repayments and as your property's value grows over time, your equity increases.

Accessing that equity doesn't require you to sell your home. Instead, you borrow against it, increasing your total loan balance in exchange for a lump sum of cash, an approved credit limit, or an increased redraw facility. Because the loan is secured against your property, the interest rate is significantly lower than unsecured alternatives like personal loans (typically 8–14% p.a.) or credit cards (typically 15–22% p.a.).

In Australia, equity access is most commonly structured as a home loan top-up with your existing lender, a cash-out refinance to a new lender, or a line of credit facility. We explain each of these in detail below.

How to calculate your equity and your usable equity

There are two equity figures worth understanding: your total equity and your usable equity. They are not the same.

Total equity is the straightforward calculation: your property's current market value minus your outstanding loan balance.

Usable equity is the amount most lenders will actually allow you to access. Most Australian lenders cap total borrowing at 80% of the current property value. This means your usable equity is calculated as: (current property value × 80%) minus your outstanding loan balance.

Worked example:

Your home is currently valued at $950,000. Your remaining loan balance is $420,000.

• Total equity: $950,000 – $420,000 = $530,000
• 80% of $950,000 = $760,000
• Usable equity: $760,000 – $420,000 = $340,000

In this example, $340,000 is the maximum amount you could potentially access without paying LMI and without selling your home. What you can actually access depends on your income and serviceability, the lender's policies, the property type and location, and what you intend to use the funds for. We calculate this precisely for your situation before recommending any loan structure.

Borrowing above 80% LVR is possible with some lenders, but LMI applies, which can be costly. In most cases, staying within 80% LVR is the most cost-effective approach.

How equity grows

Equity builds through two mechanisms operating simultaneously: active reduction of your loan balance through repayments, and passive appreciation of your property's market value over time.

On a standard principal and interest loan, every repayment reduces your outstanding balance, slowly at first (when interest makes up a larger share of each repayment), and increasingly quickly as the balance falls. Making extra repayments accelerates this process and compounds the benefit over time.

On the property value side: national median property values have grown 937.9% over 40 years in Australia, from around $76,000 in 1986 to a record high of $880,000 in December 2025, according to Cotality. In Sydney specifically, long-run growth has been even stronger. This means that for many homeowners, a significant portion of their current equity wasn't earned through repayments; it arrived passively through market appreciation.

You can also actively boost your property's value (and therefore your equity) through renovations. A well-chosen renovation (an additional bedroom, bathroom upgrade, kitchen renovation, granny flat, or energy efficiency improvement) can add value to the property above the cost of the work, increasing your equity and your usable borrowing capacity simultaneously.

4 Ways to Access the Equity in Your Home

Every borrower's situation is different, and the right method of equity access depends on your goal, your current loan structure, and whether you want to stay with your current lender. We identify the most appropriate structure for each client's specific circumstances.

1. 1

   Home Loan Top-Up (most common)

   A loan top-up is the most straightforward way to access equity. Your existing loan limit is increased by the amount you want to access, either by adding to your existing loan or creating a new split loan sitting alongside it. The additional funds are paid to you as a lump sum.

   How it works: You apply to your current lender for an increase in your home loan limit. The lender reassesses your income, expenses and the current property value. If approved, your loan balance is increased and the funds are deposited into your nominated account.

   Interest: You pay interest on the full additional amount from the moment it's drawn down. Repayments on the new total balance begin immediately.

   Best for: One-off, known costs: a builder's contract for renovations, an investment property deposit paid at settlement, clearing a specific debt, or funding a major purchase. The total amount is known upfront.

   Timeline: Approximately 1–2 weeks if staying with your current lender, as a full reapplication is not required.

   Consideration: Your current lender's rate and policies apply. If you're not on a competitive rate, a cash-out refinance may simultaneously access your equity and improve your rate, potentially at no net additional cost.

2. 2

   Cash-Out Refinance / Equity Release via Refinancing

   A cash-out refinance replaces your existing home loan with a new, larger loan; the difference between your old balance and the new loan amount is paid to you in cash. This is the most comprehensive option: it accesses your equity while simultaneously allowing you to switch lenders, negotiate a sharper interest rate, and restructure your loan features.

   How it works: We identify the best lender for your situation across our panel of 50+ lenders. The new lender approves a loan for more than your current balance. At settlement, the new lender pays out your old home loan in full and deposits the difference (your equity release) into your account.

   Best for: Borrowers who want to access equity AND improve their rate, access better loan features (offset account, redraw, split structure), or whose current lender won't approve a top-up on favourable terms.

   Timeline: Approximately 3–4 weeks.

   Consideration: Involves the full refinancing process including a new property valuation, credit assessment, and settlement. Discharge fees apply from your outgoing lender. We run the full cost-benefit analysis (including the refinancing costs versus the rate saving and equity accessed) before recommending this route.

3. 3

   Home Equity Line of Credit (HELOC)

   A line of credit facility gives you an approved credit limit (secured against your property) that you can draw from as needed, repay, and draw from again. You pay interest only on the amount you've actually drawn, not the full approved limit.

   How it works: The lender approves a maximum credit limit based on your equity position and serviceability. You draw from this limit as needed (via linked debit card, transfer, or cheque) and repay at your own pace. Interest accrues only on the outstanding drawn balance.

   Interest: Typically slightly higher than a standard home loan rate. Most lines of credit are interest-only, which keeps monthly repayments low but means the balance reduces only through active repayment.

   Best for: Ongoing or staged expenses where the total cost isn't known upfront: a large multi-stage renovation, a series of investment purchases, or situations where you want the facility available but may not use all of it immediately. Consideration: Line of credit rates are typically higher than standard home loan rates. Without discipline, the revolving structure can mean the balance doesn't reduce meaningfully over time. We only recommend this structure where it's the most appropriate match for the client's cash flow and purpose.

4. 4

   Redraw Facility

   A redraw facility is not equity release in the traditional sense; it allows you to access extra repayments you've already made above the minimum required amount. It's available on most variable rate home loans and doesn't require a new application to the lender.

   How it works: If you've been making extra repayments on your home loan, those excess funds sit in a redraw facility. You can withdraw them back out (effectively borrowing back money you've already paid into the loan). The redraw reduces your available balance and increases your loan interest cost from that point.

   Best for: Accessing overpayments for short-term needs without a formal application. Good for borrowers who have been making extra repayments and have a specific near-term need. Consideration: Redraw is limited to the extra repayments you've actually made; you cannot redraw more than you've overpaid. It is not the same as accessing market appreciation-based equity. Some lenders impose minimum redraw amounts or restrict frequency.

Redraw vs Offset Account: What's the Difference?

This is one of the most common questions we receive, and one of the most important distinctions to understand before choosing a home loan structure, particularly for property investors.

Both a redraw facility and an offset account allow you to reduce the interest charged on your home loan. Both let you access those savings if needed. But they operate very differently, and the difference matters significantly for investors from a tax perspective.

Offset account: how it works

An offset account is a transaction account linked to your home loan. The balance in your offset account is deducted from your outstanding loan balance for the purpose of calculating interest, every single day. If you have a $600,000 loan and $50,000 in your offset account, you pay interest on $550,000, not $600,000. You save the interest on the $50,000 offset balance without reducing your actual loan balance. Your money is completely accessible at any time, just like a regular bank account. The total balance held in offset accounts across Australian banks exceeded $327 billion in the December 2025 quarter; a reflection of how widely this feature is used and valued by Australian borrowers. Key advantages for owner-occupiers: Immediate daily interest savings. Full liquidity: funds accessible at any time with no restrictions. No loan balance reduction, preserving your ability to claim a future tax deduction if you ever convert the property to an investment use.

Redraw facility: how it works

A redraw facility lets you withdraw extra repayments you've made above the minimum. When you make an extra repayment, it reduces your loan balance, and with it, your interest. If you later need those funds back, you can “redraw” them. But each redraw re-adds to your loan balance, increasing interest from that point. Key differences from offset: The money in a redraw is not a separate account; it's been applied to your loan balance. Access may be restricted (minimum amounts, limited frequency, lender discretion). More importantly for investors: when you redraw funds that were used to reduce your home loan balance, and then use those funds for personal purposes, the tax deductibility of the associated interest becomes more complicated.

The investor tax consideration

For investment borrowers, this distinction is material. According to money.com.au's home loans expert: interest on funds held in an offset account may be claimable as a tax deduction when those offset funds are used for investment purposes; which is not necessarily the case with a redraw that blends personal and investment-purpose repayments. We recommend speaking to your accountant about the tax implications for your specific situation before choosing between offset and redraw.

Our recommendation: For most owner-occupiers, an offset account provides the best combination of interest savings and flexibility. For investors, the choice between offset and redraw has tax implications that are best resolved with professional advice.

6 Smart Ways to Use Your Home Equity

1. 1. Investment property deposit: build your property portfolio without saving from scratch

   This is the most common reason Sydney homeowners access their equity, and often the most financially compelling. Using equity as a deposit for an investment property allows you to enter the investment market without years of saving. Your existing property's growth funds the next purchase. A typical investment property purchase in Sydney or surrounds requires a 20% deposit plus stamp duty and purchase costs, commonly 22–24% of the purchase price in total. If you've built sufficient usable equity, that entire amount can be funded from your existing property rather than from savings.

   Example: A home bought in Hills District in 2018 for $750,000 is now valued at $1,150,000. The remaining loan balance is $480,000. Usable equity = (80% × $1,150,000) – $480,000 = $440,000. With $440,000 in usable equity, a $150,000 drawdown could fund the deposit, stamp duty and purchase costs on a $600,000 investment property without touching savings and without selling the family home. The investment property's rental income then services its own loan. Your existing property remains in place. Your portfolio grows through leverage rather than accumulation. This is the strategy used by the majority of successful Australian property investors.

2. 2. Home renovations: increase your property value and your lifestyle

   Reinvesting equity back into your property through renovation is one of the most capital-efficient uses of home equity. A well-chosen renovation improves your daily living environment and can increase the property's value by more than the cost of the work; effectively creating equity from equity. Popular renovation projects that typically deliver strong returns include: kitchen renovations, bathroom upgrades, adding a granny flat or secondary dwelling (particularly valuable in Sydney), extensions adding usable floor space, energy efficiency improvements (solar, insulation), and landscaping or outdoor entertainment areas. Using home equity for renovations is substantially cheaper than financing renovations through personal loans (typically 8–14% p.a.) or credit cards (typically 15–22% p.a.). At home loan rates (currently in the 5–6.5% range), the cost of borrowing for renovations is significantly lower, and the loan can be structured around your cash flow. We work with renovation finance clients to determine the best structure: a lump-sum top-up if the builder's contract is fixed-price, or a line of credit if the renovation will be staged across multiple drawdowns.

3. 3. Debt consolidation: replace high-interest debt with home loan rates

   High-interest debts (credit cards at 15–22% p.a., personal loans at 8–14% p.a., car loans at 6–12% p.a.) are expensive compared to home loan rates. Consolidating these debts into your home loan can dramatically reduce your monthly repayment burden and simplify your finances into a single payment at a lower rate. A debt consolidation equity access works by increasing your home loan balance to include the outstanding balances of your other debts, then clearing those debts at settlement. The consolidated amount is then repaid at home loan rates rather than the individual debt rates. Important consideration: while monthly cash flow improves significantly, stretching short-term debt over the remaining life of your home loan can mean paying more in total interest over the full term than you would have at the higher rate over the shorter original period. We model both scenarios for every client (the short-term cash flow relief versus the long-term total interest cost) and structure the consolidation with accelerated repayment of the consolidated portion wherever possible.

4. 4. Business funding: access capital at home loan rates

   For business owners and entrepreneurs, home equity can be a lower-cost source of business capital than an unsecured business loan or commercial facility. Because the loan is secured against your property, the rate is home loan rate, not business lending rate. Typical business uses for equity access include: working capital for an established business, expansion funding, equipment purchases, business acquisition, and seed capital for a new venture. This should be approached with care: your home is the security, and a business failure doesn't extinguish the loan secured against your property. We recommend this only with a clear business plan, appropriate risk assessment, and advice from your accountant or financial adviser.

5. 5. Shares and managed investments: investing using equity

   Some borrowers use home equity to invest in the share market, managed funds, ETFs or other financial products. This strategy allows the investment to be funded at home loan rates rather than margin lending rates. The interest on the equity used for investment may be tax-deductible (speak to your accountant). This is a higher-risk use of equity than property or renovations: share market investments can fall in value, while the loan secured against your property remains due regardless. We recommend this approach only for clients with a clear investment strategy, appropriate risk tolerance, and advice from a licensed financial adviser.

6. 6. Major personal expenses: education, medical, vehicles

   Home equity can also be used for significant personal expenses: private school or university education costs, medical procedures, a major vehicle purchase, or other large one-time expenses. Because the rate is home loan rate rather than personal loan or credit card rate, the cost of borrowing is lower. We note that using home equity to fund a depreciating asset (a car, holiday) or a non-income-producing expense means increasing your mortgage without building wealth. This is not inherently wrong (it's a personal financial decision), but it should be entered into consciously and with a clear repayment plan for the additional borrowing.

What You Need to Access Your Home Equity

5 things lenders assess when you apply for equity access

1. 1

   Your equity position: how much you have and your LVR

   The starting point is your current property value and outstanding loan balance. Most lenders allow borrowing up to 80% of the current property value without LMI. We calculate your usable equity from the most accurate available property valuation before any application is lodged.

2. 2

   Income and serviceability

   Even if you have substantial equity, you still need to demonstrate that you can service the increased loan amount. Lenders apply APRA's 3% serviceability buffer, meaning they assess your ability to service the loan at your new rate plus 3%. We assess your serviceability before recommending an equity release amount, so you approach lenders with an amount you can confidently qualify for.

3. 3

   Current repayment history and credit profile

   Lenders want to see a clean repayment history on your existing home loan and other debts. A strong track record of making repayments on time is positive evidence of your ability to manage the increased obligation. Your credit file is checked as part of the application; we avoid unnecessary credit inquiries by confirming eligibility before lodging.

4. 4

   Property type and location

   Lenders apply different LVR caps and valuation policies depending on property type and location. Standard residential properties in established suburbs attract the most straightforward treatment. Properties in areas with limited sales data, certain property types (high-density apartments, serviced apartments, rural land) may attract more conservative valuation assessments or lower maximum LVRs. Our knowledge of the Sydney Hills District market means we know which lenders value local properties most accurately.

5. 5

   Purpose of funds

   Most lenders ask for the intended use of the equity release. Some purposes (investment property deposit, renovation with fixed-price contract) attract straightforward assessment. Others (general cash-out, personal expenses) may attract additional scrutiny from some lenders. We match the purpose to the lender whose policy is most aligned, minimising friction in the approval process.

When Equity Access May Not Be the Right Move

We give honest advice. There are situations where accessing equity doesn't make financial sense, and we'll tell you when that's the case.

• LVR already above 80%: If your current loan-to-value ratio is already at or above 80%, further equity access will require LMI, a non-trivial cost. In some cases the purpose justifies it; in others, it's better to wait until property value growth or additional repayments bring the LVR below 80%.
• Property values have fallen recently: If values in your area have declined since you purchased, your equity may be lower than you expect. We verify current valuation before recommending any equity release, including in areas where valuation outcomes are less predictable.
• You can't comfortably service the increased repayment: Equity is not free money. Releasing it increases your loan balance and your repayments. If your income, expenses and financial buffers don't comfortably accommodate the additional obligation (particularly stress-tested for a further 1–2% rate increase), the risk is higher than the benefit.
• Speculative or high-risk intended use: We are not in the business of facilitating speculative investment or financial decisions that create unreasonable risk for our clients. If the intended use of the equity is high-risk (cryptocurrency speculation, margin lending into a falling market, funding a business with no financial plan), we'll say so.
• Alternative funding is more appropriate: Sometimes the right answer is a personal loan, a business loan, or a financial product other than equity access. We identify the best solution for your situation, not just the one that involves a new or larger home loan.

How Equity Access Works: Step by Step

1. 1

   Free Equity Review and Calculation

   We calculate your usable equity using the most current available property valuation data and your outstanding loan balance. We identify how much you could potentially access, under what structure, and from which lender, at no cost and with no credit check.

2. 2

   Strategy and Structure Assessment

   We review your goal (renovation, investment, consolidation, other) and recommend the best structure: loan top-up with current lender, cash-out refinance to a new lender, or line of credit. We run the numbers on repayments, serviceability and cost before recommending any course of action.

3. 3

   Lender Matching and Application

   We identify the lender on our panel of 50+ whose assessment criteria, valuation methodology and product features best match your situation and purpose. We prepare and submit the application, including all required documentation: income evidence, bank statements, existing loan statements, identification, and any property-related documents.

4. 4

   Valuation and Formal Approval

   The lender orders a property valuation (automated or physical). Their assessment team reviews your income, expenses and credit profile. We manage the process and respond promptly to any information requests. Formal approval is issued when all criteria are satisfied.

5. 5

   Settlement and Drawdown

   For a loan top-up: your new limit is activated and funds deposited. For a cash-out refinance: the new lender settles your existing loan and deposits the equity release. For a line of credit: your approved facility is established and ready to draw. We confirm settlement, your new repayment details, and provide a final summary.

Equity Home Loans Across Sydney's Hills District and Greater Sydney

RyRo Loan Centre is based in Norwest, in Sydney's Hills District. We help homeowners across the Hills District and greater Sydney calculate, structure and access the equity in their property.

Hills District: Equity home loans and equity access for homeowners in Castle Hill, Kellyville, Rouse Hill, Baulkham Hills, Norwest, The Hills, Bella Vista, Glenhaven, Round Corner, Cherrybrook, Pennant Hills, West Pennant Hills, Beecroft, Carlingford, and surrounding areas. The Hills District has experienced strong property value growth over recent years. Homeowners who purchased in Castle Hill, Kellyville or Baulkham Hills five to ten years ago have typically seen significant equity appreciation; in many cases, hundreds of thousands of dollars above purchase price, above and beyond any repayments made. If you're a Hills District homeowner who has not reviewed your equity position recently, now is the time.

Parramatta and Western Sydney: Equity access for homeowners in Parramatta, Westmead, Merrylands, Guildford, Auburn, Granville, Blacktown, Seven Hills, Penrith.

Northwest Sydney: Equity access for homeowners in Schofields, Box Hill, Marsden Park, Riverstone, Gables, Windsor.

Inner West and Strathfield: Equity access for homeowners in Strathfield, Burwood, Concord, Homebush, Lidcombe, Rhodes.

Northern Suburbs, Northern Beaches, Eastern Suburbs, South Sydney and beyond: We work with clients across all of Greater Sydney and across Australia.

Free Calculators: Understanding Your Equity

4 tools to help you understand your equity position

1. 1. Home Equity Calculator

   Enter your estimated property value and outstanding loan balance to see your total equity and usable equity (based on 80% LVR).

   Borrowing Power Calculator →

2. 2. Equity Release Calculator

   Enter your equity release amount and intended interest rate to model the impact on your monthly repayments. Loan Repayment Calculator →

3. 3. Offset vs Redraw Comparison Calculator

   Enter your loan balance, current rate, and savings balance to see the interest saving difference between an offset account and a redraw facility. Home Loan Offset Calculator →

4. 4. Home Loan Top-Up Repayment Calculator

   Model the new total repayment on your existing balance plus your equity release amount. Loan Repayment Calculator →

Related Home Loan Services

1. 1. Refinancing Home Loans

   Review your current rate, compare 50+ lenders and manage the full refinancing process; often the best way to simultaneously access equity and improve your rate.

2. 2. Investment Property Loans

   Equity access is frequently the first step in an investment property strategy. We finance the investment purchase, manage the equity release from your existing property, and structure both loans for optimal cash flow.

3. 3. Home Loans

   Owner-occupier purchase loans, first home buyer loans, construction loans and established property finance.

4. 4. Home & Land Package Loans

   Land and construction loan structures for buyers purchasing house and land packages in Sydney's growth corridor estates.

5. 5. First Home Buyer Loans

   First home buyer guidance including the 5% Deposit Scheme, FHOG, stamp duty concessions and pre-approval management.