What to do with your home equity

Written by view.com.au in Finance on November 24, 2016

What to do with your home equity

So you have owned your home for a while and have accumulated some equity in your home. It might be time to start thinking about how to use it.

There’s a good chance that what you need from your home today isn’t the same as when you moved in. Whether that’s because you’ve kicked the kids out or you just have different priorities that go along with the different stage in your life.

There’s a lot you can do with home equity. It’s time to think about what you want in your life and whether using your home equity is a good way to get it.

Ways to use home equity

There are plenty of things you can do with your home equity, most of these fall into two categories: improving your lifestyle or increasing your wealth. So, let’s start with the fun stuff.


It’s never too late to get out and see the world. Taking a much deserved holiday is a great way to use some of your home of your home equity, especially if there are places that you’ve always wanted to visit.

New Car:

Has the family car seen better days? You can upgrade to newer model or even get the sports car of your dreams if you don’t have to cart your kids around anymore.

Home renovations:

Renovating your home is a good way to improve your lifestyle and increase your wealth at the same time. You can build an extension, put in a pool, add a level, or landscape your garden.


If your goal is to increase your wealth, then you can use your home equity to purchase things like shares or even an investment property. Your home equity is likely your biggest financial asset, so it makes a lot of sense to leverage it to further grow your wealth and your retirement nest egg.

Whatever it is you want in your life, using your home equity could be a good way to get it.

Before you get too excited

Tapping into your home equity can be a good way of financing many different things. However, as with any financial decision, you need to consider how you to use your home equity carefully.

For many people, the home is their most valuable asset. Not only that, but it’s an essential part of many retirement plans. With that in mind, here are a few things you need to consider:

  • Risks – If you plan to reinvest your home equity to increase your wealth, there are no guarantees your investment will increase in value. Always get expert investment advice.
  • Debt – Using home equity to purchase other things increases the size of your home loan and your debt.
  • Costs – There may be bank fees associated with using your home equity, and if your equity drops below 20%, you may need to pay Lenders Mortgage Insurance.

Always check yourself before you wreck yourself. Make sure you get expert financial advice before you make any decisions. Your home equity is extremely valuable and important. Whatever you decide to do with it, you need to make your decision carefully and with the expert financial advice.

About the author: Rapid Finance are finance brokers who specialise in finding solutions that suit the needs of their customers. They help Australian businesses, families, and individuals with a wide range of finance products.