If you have owned a home in Perth for several years, it may now be worth considerably more than when you bought it.
That could mean you have built up equity that may be used to renovate, fund the deposit and purchasing costs for an investment property, consolidate debts or cover another significant expense.
Rising property values do not automatically mean a lender will let you borrow more. Before accessing equity, you need to understand how much equity you have, how much may be accessible and whether you can afford and qualify for the additional loan.
What is home equity
Equity is the difference between your property’s current value and the amount secured against it.
For example:
| Property position | Amount |
| Estimated property value | $900,000 |
| Current home loan balance | $300,000 |
| Total equity | $600,000 |
Your equity can increase when you repay your loan, when your property rises in value or through a combination of both.
This is particularly relevant in Perth, where property values have risen strongly in recent years. REIWA’s latest figures put Perth’s median house sale price at approximately $960,000 for the 12 months ending August 2026. Individual results vary considerably by suburb, property type and condition.
How much equity can you use
Your total equity and your usable equity are not the same thing.
As a general guide, many borrowers calculate usable equity by limiting the total lending to 80% of the property’s value:
Property value × 80% − existing loan balance = estimated usable equity
Using the previous example:
| Calculation | Amount |
| 80% of the $900,000 property value | $720,000 |
| Less existing loan balance | $300,000 |
| Estimated usable equity | $420,000 |
This does not mean the homeowner can automatically borrow another $420,000. The lender will still assess:
- income and employment
- living expenses
- existing debts and credit card limits
- credit history
- the purpose of the additional borrowing
- the proposed loan repayments
- its own valuation of the property
Some lenders may allow borrowing above 80% of the property’s value, depending on the borrower and loan purpose. However, this may involve Lenders Mortgage Insurance, a higher interest rate or additional lending restrictions.
Having at least 20% equity can also put borrowers in a stronger position when refinancing or negotiating with a lender.
What can home equity be used for
Common uses include:
- renovating or improving the home
- funding an investment property deposit and purchasing costs
- investing in shares or other assets
- consolidating higher interest debts
- paying education costs
- buying a vehicle
- covering another large planned expense
The fact that equity is available does not automatically make using it a good decision. Borrowing for an improvement that may add long-term value to your home is different from adding a rapidly depreciating car or short-term personal spending to a 30-year mortgage.
Debt consolidation also requires discipline. The interest rate may be lower, but stretching a short-term debt over many years can mean paying considerably more interest overall unless the loan is repaid faster.
Ways to access your equity
The most suitable structure depends on what the money will be used for.
Home loan top up
A top up increases your existing home loan and releases an agreed amount. It can be a straightforward option for a defined expense, but combining different types of borrowing in one loan can make the debt harder to track.
Separate loan split
A new split sits alongside your existing home loan. This can make budgeting and record-keeping easier, particularly when the funds will be used for an investment. Interest deductibility generally depends on how the borrowed money is used, not simply which property secures the loan, so obtain tax advice before proceeding.
Refinancing
Refinancing replaces your existing loan with a new facility, either with your current lender or a different lender.
It may allow you to access equity while also reviewing your interest rate, loan features and overall structure. Discharge fees, application costs, valuation results and possible LMI should be considered before switching.
Line of credit
A line of credit allows funds to be accessed progressively, with interest generally charged only on the amount drawn. This may suit staged expenses, but easy access to credit can also encourage overspending. Product availability, rates and fees vary between lenders.
The risks of accessing equity
Using equity means taking on more debt. Your property value may have increased, but the money released is not free money.
Before proceeding, consider:
- how much the new repayments will be
- whether you could still afford them if rates increased
- whether the borrowing has a clear, worthwhile purpose
- whether the loan term will outlast what you are buying
- the effect on your emergency savings and future plans
- what happens if your income falls or your expenses increase
Your property is security for the lending. If repayments cannot be maintained, your home may ultimately be at risk.
The RBA’s March 2026 review found that mortgage arrears remained low and had declined, although highly leveraged and lower-income borrowers remain more vulnerable to changes in rates, income and expenses.
How much equity do you have
If you are considering a renovation, investment property or another major expense, Fox Mortgages can help you:
- obtain or assess a current property valuation
- estimate your usable equity
- calculate the likely repayments
- assess your borrowing capacity
- compare suitable loan structures and lenders
The aim is not to borrow as much as your property allows. It is to find a borrowing level and loan structure that supports what you are trying to achieve without placing unnecessary pressure on your finances.
Fox Mortgages is a Credit Representative (483820) authorised under Australian Credit Licence 389328. The information in this article is general in nature and doesn’t take into account your personal objectives, financial situation or needs. It isn’t legal, tax or financial advice — please seek professional advice tailored to your circumstances before making a decision. Lending is subject to lenders’ terms, conditions, fees and eligibility criteria.