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What is equity? How can it help you buy investment property?

How home equity works

Equity is the amount of your home that you own outright and don't owe against, not including anything that you still owe the bank. If you've repaid 60% of your home loan then it means that your equity is 60% of the home's value.

If you already own a home you're likely to have built up your equity. Unlocking this could let you buy that second property without a cash deposit.

What using equity means

The most popular way of tapping into your equity is refinancing your current home loan. You may even get access to a lower interest rate on your refinance loan. Keep in mind that using equity means the total amount owing on the home loan will increase, potentially leading to higher monthly repayments. For more information, talk to one of our dedicated home loan managers today by calling 1300 694 722.

How much equity can you use

Generally, you can use up to 80% of the property value as equity towards a loan, In some instances, you may need to take out Lender's Mortgage Insurance (LMI). However, this varies based on the type of property, location of the property, purpose of the loan and the bank's policy.

We use a calculation called Loan to Value Ratio (LVR), which is based on your existing loan divided by the current property value. 

Home equity is yours to use freely and we've made it simple for you to refinance your home loan over to us.

Here is how that's done:
Contact us Complete the online enquiry form Next steps Approval

Talk to us on the phone by calling 1300 694 722 or online about your refinancing options.

 

Alternatively, you can pop into a branch today and get personalised help.

If you can't visit a branch or call us, you can submit your enquiry online.

 

Tell us some details about you and the property including any:

 

  • income and expenses
  • debts and assets

     

If you're not sure what else to include, don't worry, we'll be reaching out to help.

 Talk to your own home loan manager and discuss what else you will need in order to refinance/apply for a loan. Seek your new loan approval and you're one step closer to purchasing your investment property.
Here is how that's done:
Contact us

Talk to us on the phone by calling 1300 694 722 or online about your refinancing options.

 

Alternatively, you can pop into a branch today and get personalised help.

Talk to us on the phone by calling 1300 694 722 or online about your refinancing options.

 

Alternatively, you can pop into a branch today and get personalised help.
Complete the online enquiry form

If you can't visit a branch or call us, you can submit your enquiry online.

 

Tell us some details about you and the property including any:

 

  • income and expenses
  • debts and assets

     

If you're not sure what else to include, don't worry, we'll be reaching out to help.

If you can't visit a branch or call us, you can submit your enquiry online.

 

Tell us some details about you and the property including any:

 

  • income and expenses
  • debts and assets

     

If you're not sure what else to include, don't worry, we'll be reaching out to help.
Next steps Talk to your own home loan manager and discuss what else you will need in order to refinance/apply for a loan. Talk to your own home loan manager and discuss what else you will need in order to refinance/apply for a loan.
Approval Seek your new loan approval and you're one step closer to purchasing your investment property. Seek your new loan approval and you're one step closer to purchasing your investment property.

Once these steps are complete, it's time to pat yourself on the back and welcome yourself to HSBC.

Planning to invest?

We're here to help you get one step closer to financial freedom. Talk to one of our home loan managers by enquiring online or calling 1300 694 722, today.

Important information

This article is intended to provide general information of an educational nature only.  This information should not be relied upon as financial product advice as it does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of the information to your own circumstances and seek independent legal and financial advice prior to making any investment choice.  There are risks associated with any investment and this document is not intended to list all of them in respect to any particular investment opportunity. Prices, levels and indications contained in this document are illustrative only and may not represent future performance. HSBC does not warrant or represent the performance of any investment opportunity. 

Credit provided by HSBC Bank Australia Limited ABN 48 006 434 162. Australian Credit Licence/AFSL 232595. Home Loan Terms, Personal Banking Booklet, fees and charges and lending criteria apply.

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