Property valuation
Different lenders may reach different valuations. The figure used for lending can be lower than an agent appraisal or your expected sale price.
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Home equity · Victoria
Turn home equity into a practical next-home plan
Equity can help fund the deposit and costs for your next home, but not every dollar is immediately usable. A lender-supported valuation, the existing mortgage, loan-to-value limits and your ability to service the new debt all influence what may be available.
Next-home planning across Victoria
The short answer
How is usable equity calculated?
A simple estimate starts with the lender's accepted property value, applies its permitted loan-to-value ratio, then subtracts the mortgage balance. The result is only a starting point: borrowing capacity, loan purpose, lender policy, costs and the proposed new property can reduce the amount that is actually available.
Build the plan first
Separate total equity from usable equity
Total equity describes your ownership stake. Usable equity is the portion a lender may allow you to access while keeping the loan within its policy and ensuring the total debt remains affordable.
- A lender-supported valuation rather than an optimistic asking price
- The current loan balance and any redraw or linked facilities
- The loan-to-value ratio before and after releasing equity
- Your capacity to repay the combined or replacement lending
Loan-to-value ratio
Accessing more equity increases the loan relative to the property value. Higher ratios can change rates, policy requirements and whether lenders mortgage insurance applies.
Deposit and costs
Released equity may contribute to the contract deposit, land transfer duty, registration, conveyancing and other eligible purchase costs.
Loan structure
The released funds, current loan and new home loan should be structured around their purposes. Get tax advice if any property may become an investment.
Compare the pathways
Equity release or wait for sale proceeds?
Both can provide funds for the next purchase, but they arrive at different times and carry different levels of certainty.
Decision point
Release equity before sale
Use proceeds after sale
Availability
Subject to valuation, approval and available equity.
Known after the sale price and costs are finalised.
Timing
May provide deposit funds before the current sale settles.
Requires the sale to settle before the funds are available.
Debt
Increases secured lending before the sale.
Sale proceeds can reduce the amount borrowed for the next home.
Main variable
Lender valuation and servicing policy.
Final sale price, costs and settlement timing.
How it works
From rough idea to finance-ready plan.
- 01
Review the current property, mortgage balance, income and likely next purchase costs.
- 02
Obtain an appropriate valuation and compare equity-release policies and loan structures.
- 03
Confirm approved funds and conditions before relying on equity for a contract deposit.
Common questions
Clear answers for Victorian home movers
Is equity the same as cash?
No. Equity is the difference between property value and debt. Accessing it generally means increasing secured borrowing, subject to lender approval, valuation, serviceability and loan-to-value limits.
Can equity cover the deposit and stamp duty?
Approved equity-release funds may be used for eligible deposit and purchase costs, but the available amount and acceptable use depend on the lender and structure. Confirm availability before signing a contract.
Do I need to refinance to access equity?
Not always. Your current lender may offer a loan increase or separate split, while refinancing could provide different pricing or policy. The total benefit should be compared with switching costs and features.
Can I use equity and keep my current home?
Potentially, if the lender is satisfied with the valuation, total debt, rental-income treatment and your ability to service both properties. Tax and cash-flow advice may also be important.
Could lenders mortgage insurance apply?
It may apply where the lending exceeds the lender’s threshold relative to property value. Policies, premiums and acceptable ratios vary between lenders and borrower profiles.
Reviewed 13 September 2026 by Chris Berry. General information only; lending criteria and costs vary. Your conveyancer or legal practitioner should advise on contracts and settlement conditions.
Victoria-specific reference: Consumer Affairs Victoria buying and selling property guidance .
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