Building equity
in your home

Most people enter a home loan with the eventual goal to own their property outright, in other words, building equity in your home. Equity is essentially the difference of what you owe on your property to how much it is worth. The equity you own in your home is the property’s market value minus what you owe on your home loan. For example, if you home is worth $600,000 and you have $300,000 left to pay on your home loan, you have $300,000 in equity. It gives you a Loan to Value Ratio (LVR) of 50%.

Home equity takes into account the market value of your property as well as the repayments made. Therefore, as time passes and you continue to make regular repayments, your equity is likely to grow until you own your home in its entirety.

 

 

Building equity in your home

 

The most common question after ‘what is equity?’ is ‘how do I get more of it?’. Luckily, there are some achievable strategies you can use to build the equity in your home dependent on your situation:

 

 

With a little extra knowledge and some strategic planning it’s possible to shave years off your home loan. It’s never too late to consider how you could build equity in your home more quickly and reap the rewards in the future. Apply for a home loan now to talk to a home loan lending specialist.

The information in this article is of a general nature. It is important to obtain financial advice specific to your circumstances.