Refinance / Restructuring
Can You Refinance To Release Equity?
5 min read- Finance Guide
- Updated 2026
Quick answer
Many borrowers aim to keep total lending around
80% 90%
Of the property value depending on lender policy and costs
- Main assessment bases Valuation + serviceability
- Common uses Renovation, purchase, debt consolidation
- Extra cost trigger LMI may apply above 80%
1300 421 044
1300 421 044
Key concepts in equity release
Usable equity
Usually the portion of equity left after applying the lender's maximum LVR and subtracting the current loan balance
Property valuation
A new valuation commonly determines how much equity is actually available, not just an online estimate or expected price
Cash out purpose
Lenders often ask what the extra funds are for because different purposes can attract different policy treatment
Serviceability
Even with strong equity, the new total loan still needs to fit the lender's repayment assessment
Ways equity can be released
The structure used for equity release can matter for clarity, flexibility and future tax or accounting treatment.
Refinance
Replace the existing loan
The old mortgage is paid out and a larger facility is settled with the new lender
Top up or loan increase
Increase the current facility
Some existing lenders allow borrowers to increase their home loan instead of moving lenders
Separate split
Keep the equity portion distinct
A separate split can help keep the released funds and their purpose easier to identify and manage
Need Help with your Project?
What lenders usually assess
Lenders normally review the following when assessing an equity release refinance:
-
01. Current property value and target total lendingLVR position
-
02. Income, debts, living expenses and repayment buffersServiceability
-
03. Declared use of funds and supporting evidence where neededCash out policy
Common problems with equity release refinancing
Valuation is lower than expected
If the new valuation comes in below expectations, the amount of usable equity can shrink quickly.
Possible solutions include:
Reduce the requested cash out amount- Keep the total lending at a lower LVR
- Consider an alternative lender valuation pathway
Serviceability does not work
Borrowers may have ample equity but still not qualify for the larger loan amount under the new lender's assessment model.
Possible solutions include:
- Reduce the amount requested
- Extend the term if appropriate
- Restructure debts before applying
Costs outweigh the benefit
Break costs, application fees, LMI or debt consolidation risks can reduce the value of the refinance.
Possible solutions include:
- Compare the full switching cost, not only the rate
- Review whether a top up is simpler than a full refinance
- Keep unsecured debt risks in mind before rolling them into the home
Steps to release equity by refinancing
Step
01
Estimate the property's current value and the likely usable equity
Step
02
Define the purpose of the funds and the amount actually required
Step
03
Prepare income, liability, loan and repayment history documents
Step
04
Compare lenders, costs and structure options such as new splits or top ups
Step
05
Submit the application and let the lender complete valuation and assessment
Step
06
Settle the refinance and access funds under the approved structure
Speak with a Property Finance Specialist
Equity release looks simple on the surface, but lender policy can change a lot depending on valuation, LVR, cash out purpose and the borrower profile.
A specialist can help work through the real usable equity position and identify which lender structures may fit best.
Speak with a finance specialist about refinancing to release equity.
Submit the short form below and a finance specialist will review your property position, likely equity access options and possible refinance pathways.
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