Re-financing for reno query

Discussion in 'Financial Planning' started by zuzu111, 16th Apr, 2021.

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  1. zuzu111

    zuzu111 Member

    Joined:
    17th Oct, 2018
    Posts:
    11
    Location:
    nsw
    Hi All
    We purchased a home almost two years ago, our fixed rate term ends in August. Fortunately for us, our suburb has exploded in value over the past 6 months, thanks in part to a huge water-front development being almost completed around the corner. Our suburb has had 3 homes (albeit, very well renovated) in the past 2 weeks break the suburb price records.

    Conservatively, we would think our home would be valued at 700k. By August, our loan balance will be 475k with 28 years remaining.

    We are hoping to withdraw about 70k equity and re-finance (<80% LVR). Our current fixed rate is 3.19; however, this is clearly quite high for current market.

    Our income is slightly better than when we initially got the loan. I am not so sure of the process or whether this is common to do this?
    Cheers
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,672
    Location:
    Australia wide
    You can't withdraw equity, but you could potentially borrow more money secured against the property. You will have to explain what the money will be used for, meet the cash out criteria and should consider the tax implications now and down the track.
     
  3. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    4,982
    Location:
    QLD/Australia Wide
    Quite common, some lenders are better at the equity release than others.
    Suggest engaging a broker to review your options and find the most suitable product for you