Can I get rid of our equity loan?

Hi everyone

I have a question which I thought I would post here before heading to the bank.

My partner and I bought our first home together last June. We didn't quite have the 20% deposit, so we used some equity in my investment property and now have an equity loan of roughly $70k.

Houses in our area are skyrocketing, with houses on our street going for $100k more than what we paid and houses a few streets over going for $200k more than we paid, all for the same block size and bedrooms.

My question is - if we were to get our house valued by the bank, is there a possibility of getting rid of the equity loan now that we may have the 20%? Is that a thing? Like how if you have a guarantor and you have 20% equity, you can remove them.

Any info would be greatly appreciated.

Thanks

 

Yes, you could increase the existing loan by $70k and use this to pay off the other loan - which is a refinance, without changing lenders, and won't affect tax deductibility now or in the future

 

Yes it can be done, you're essentially moving the debt from one security (the IP) to another (the Owner Occ)
Good time to see a Broker to see what lender and product options are available to you.

 

As long as valuation stacks up and can pay of the equity loan and not exceed 80% then you'll have a winner.

 

If both properties are held with the same lender and the equity position on your new home is strong enough, it may be possible to simply do a security substitution on the equity loan rather than going through a complete refinance.