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Refinancing Equity Strategy

Equity Reset Plan: Unlock Your Home's Potential

Every year you hold your home, you're likely building equity — often without a plan for what to do with it.


An equity reset is simply a deliberate review of that equity and a decision about whether it should keep sitting quietly in your property or start working harder for you.

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What "Resetting" Your Equity Actually Means

Equity is the gap between what your property is worth and what you still owe on it. As property values rise and your loan balance falls, that gap grows — but unlike cash in a bank account, it doesn't do anything on its own.

An equity reset means refinancing to access some of that built-up equity and redirect it toward a clear financial goal, rather than leaving it as an untouched number on paper.

What an Equity Reset Is Typically Used For

  • Consolidating higher-interest debt. Rolling credit cards or personal loans into a structured, purpose-specific split against your home loan rate, rather than continuing to service them separately at a much higher cost.
  • Funding a deposit for an investment property. Using equity as the deposit, rather than saving one separately, is one of the most common ways established homeowners move into property investment.
  • Restructuring for tax effectiveness. Separating deductible and non-deductible debt into clearly defined splits, particularly relevant if part of your equity is being used for investment purposes.
  • Renovations. This is common too, but if renovation funding is your main focus, see the dedicated using equity for renovations guide for a deeper look at that specific use case.

What Determines How Much You Can Access

Most lenders allow borrowing up to 80% of your property's current value without triggering Lenders Mortgage Insurance, though some will lend higher with LMI applied.

Your accessible equity is calculated as your property's current value at that threshold, minus your existing loan balance.

Your serviceability — whether your income can support the increased loan amount — is assessed separately, and ultimately determines how much of that equity you can actually draw on.

What to Consider Before Resetting Your Equity

  • It increases your total debt. Accessing equity means borrowing more against your home, even if the rate is lower than the debt you're replacing — this is a genuine trade-off, not a free upgrade.
  • Purpose matters for deductibility. If part of the equity is used for investment purposes, keeping it in a clearly separated loan split protects the deductibility of that portion.
  • LMI may apply if you push above 80% LVR. Worth checking this threshold before assuming a given amount is accessible without additional cost.
  • It should fit a specific goal. An equity reset works best when there's a defined use for the funds — debt consolidation, an investment deposit, a restructure — rather than accessing equity without a plan for it.

A Realistic Example

A homeowner with a $600,000 property and a $350,000 loan balance sits at roughly 58% LVR.

Accessing equity up to 80% LVR would make around $130,000 potentially available, subject to serviceability.

Directed toward consolidating $25,000 of credit card debt and funding a $60,000 investment property deposit, that equity goes from sitting idle to actively reducing interest costs and building a second income stream — provided the structure and serviceability genuinely support it.

See What Your Equity Could Actually Do

An equity reset only makes sense with a clear goal and the right structure behind it. A review can show you what's realistically accessible and how it could be put to work.

Read the Full Refinancing Guide
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