How to refinance to access equity for your next property

Your Hawthorne home might be worth more than you think.

If you bought in this riverside suburb even five years ago, there's a solid chance your property has increased in value. That growth translates into equity, and with the right refinance structure, you can access that equity to fund your next investment property without selling your current home.

What does accessing equity through refinancing actually mean?

Accessing equity means borrowing against the increased value of your property to release cash for another purpose. When you refinance to access equity, your lender revalues your property and may approve a larger loan amount based on that updated valuation. The difference between your new loan and what you currently owe is paid out to you as cash, which you can then use as a deposit for an investment property.

Consider someone who purchased a Queenslander in Hawthorne for $850,000 several years ago with a $680,000 mortgage. Their home is now valued at $1.1 million, and they've paid their loan down to $620,000. That gives them $480,000 in equity. If they refinance and borrow up to 80% of the property's value, they could access around $260,000 in cash while keeping their total loan at $880,000. That's enough for a deposit on a solid investment property in nearby suburbs like Coorparoo or Morningside, plus costs.

This is different from simply refinancing to lower your rate. You're actively increasing your loan amount to pull equity out, often called a cash-out refinance.

Why Hawthorne homeowners are in a strong position to access equity

Hawthorne's proximity to the Brisbane CBD, the river, and established schools makes it one of the more tightly held suburbs in the inner east. Properties here don't turn over as frequently as newer developments, and when they do, values have remained resilient. For lenders, that stability translates into confidence when approving equity release.

If you own a character home on one of the elevated streets near Hawthorne Park or closer to Oxford Street, your property valuation may surprise you. Lenders will order a formal valuation as part of the refinance process, and in suburbs with limited stock and strong demand, those valuations often reflect recent comparable sales rather than what you paid years ago.

This positions Hawthorne owners well when applying to access equity. Lenders are more willing to approve higher loan-to-value ratios when the underlying asset is in a suburb with consistent demand and limited downside risk.

How much equity can you actually access?

Most lenders will allow you to borrow up to 80% of your property's current value without requiring lender's mortgage insurance. If your property is worth $1.2 million, that means your total borrowing can go up to $960,000. Subtract what you currently owe, and the remainder is the equity you can access.

Going above 80% is possible, but you'll pay lender's mortgage insurance, which can add thousands to your upfront costs. In most scenarios, staying at or below 80% makes more financial sense unless the investment opportunity is time-sensitive and the numbers still work with the added insurance cost.

Your borrowing capacity also plays a role. Even if you have $300,000 in accessible equity, the lender still needs to assess whether you can service the higher loan repayments. That's where income, existing debts, and living expenses come into play. If your income has increased since you first bought, or you've paid down other debts, your serviceability might be stronger than when you took out your original mortgage.

The refinance process when accessing equity for investment

The process starts with a property valuation and a loan review. Your lender will want to confirm the current value of your Hawthorne property and assess your ability to service the increased loan amount. They'll also want to understand what you're using the funds for, and investing in property is generally viewed favourably compared to other uses like personal spending.

Once your valuation comes back and your application is approved, the lender will provide a formal offer. You'll see your new loan amount, your repayment schedule, and the terms attached to the loan, including whether you're on a variable or fixed rate. If you're currently on a fixed rate and haven't reached the end of your fixed rate period, you may face break costs, which need to be factored into your decision.

After settlement, the funds are released. You can then use that cash as a deposit on your next property. If you're planning to use the funds for an investment loan, many buyers structure the equity release and the new purchase loan together to make sure the tax treatment and offset accounts are set up correctly from the start.

Should you fix or stay variable when refinancing to access equity?

This depends on your plans for the investment property and your tolerance for rate movements. If you're accessing equity and then immediately applying for an investment loan, you might want to keep your Hawthorne home loan on a variable rate with an offset account. That gives you flexibility to make extra repayments and access those funds again if needed.

If rates are sitting at a point where locking in feels sensible, a split loan structure can work. You fix a portion of your loan for certainty on repayments, and keep the rest variable with an offset so you can still manage cashflow and make lump sum payments without penalty.

There's no universal answer, but in our experience, investors who plan to buy multiple properties over the next few years tend to favour variable loans with offset accounts on their owner-occupied properties. It keeps their options open.

When refinancing to access equity doesn't make sense

If your current loan already has a low rate and strong features, refinancing purely to access equity might not be worth it if you're giving up those benefits. Some older loans come with features that no longer exist, like unlimited redraws or no ongoing fees. Before moving, check what you're walking away from.

Refinancing also costs money. Application fees, valuation fees, discharge fees from your current lender, and potential settlement costs all add up. If you're only accessing a small amount of equity, those costs might eat into the value of the exercise. Run the numbers, or better yet, have someone run them with you during a loan health check.

Finally, if your income or employment situation has changed and your serviceability is weaker than when you first borrowed, you might not be approved for the increased loan amount. Lenders assess your current financial position, not what it was when you took out your original mortgage.

Accessing equity to invest in property can accelerate your wealth-building, but only if the structure works for your income, your goals, and the market you're buying into. If you're sitting on equity in Hawthorne and you've been thinking about your next move, now's the time to look at what's actually available to you. Call one of our team or book an appointment at a time that works for you.

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