Homeowners Gaining a $71,000 Wealth Surge (on Average!)

Now is the perfect time to invest in a property! It's almost unbelievable how the property market continues to defy expectations, isn't it? Despite economic challenges and rising interest rates, home prices have not only held steady but surged over the past year.

This leaves homeowners across the nation feeling a little bit richer since January 2023 – $71,832 richer, to be precise, according to CoreLogic's latest data. That's a remarkable 10.2% increase in just 14 months, averaging out to a monthly boost of $5,130. Quite a significant figure, especially when compared to the average monthly earnings of a full-time Australian worker after tax, which stands at $6,565.

But beyond the mere satisfaction of seeing your property appreciate in value, rising home prices can open up a world of financial opportunities for homeowners.

Unlocking the Wealth Potential of Your Home Equity

When your home's value increases, so does your home equity – provided your mortgage remains the same. Home equity is essentially the difference between your property's market value and the remaining balance on your mortgage.

For instance, if your home is valued at $1,000,000 and you still owe $500,000 on your mortgage, your home equity amounts to $500,000. However, home equity is more than just a mere number on paper but it can serve as a valuable asset that can be leveraged to further your financial goals.

Maximising Your Home Equity

Here are three strategies to help you make the most of your newfound home equity:

Refinance for Savings

With higher home equity, refinancing your mortgage to secure a better interest rate or more favourable home loan terms can lead to significant savings over time. Additionally, features like offset accounts can help you pay off your mortgage sooner, providing even greater financial benefits.

Investment Opportunities

Your increased home equity can serve as a substantial deposit for purchasing an investment property. By venturing into the world of real estate investment, you will gain from rental income, potential tax advantages, and the long-term appreciation of your property assets.

Renovation Financing

Want to enhance your property's value through renovations? Tap into your home equity to fund these projects. Whether it's a kitchen remodel or a backyard overhaul, utilising your equity allows you to make improvements that can further boost your home's worth.

Understanding Equity Release

Although the concept of "cashing out equity" may sound complex, it's quite straightforward.

Consider this scenario: You purchased a home for $800,000 three years ago, and it's now valued at $1 million. With an original mortgage of $600,000, which you've diligently reduced to $500,000, you could refinance your loan to access your increased equity.

By refinancing your home loan to $700,000 (70% of your property's new value), you could unlock $200,000 to finance your renovations or invest in additional properties.

Remember, most banks allow borrowing up to 80% of a property's value, potentially providing even more equity to utilise.

Ready to Take Advantage?

If you're a homeowner looking to make the most of your newly enlarged home equity, don't wait any longer. At Osinski Finance, we can help you unlock the full potential of your home equity and put it to work in ways that can help you boost your personal wealth. Whether you are a first home buyer opting for a low deposit loan, want to refinance to save on interest, fund an investment property, or fund renovations, we are here to guide you every step of the way.

Get rid of your fears! Explore how your home equity can work harder for you, and don't hesitate to reach out to us. We can provide a comprehensive assessment of your equity position and tailor a strategy to help you achieve your financial objectives. 

Don't miss out on the opportunity to leverage your increased wealth and pave the way towards a brighter financial future with a professional mortgage broker.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.