5 min read

7 Ways of Creating Home Equity [Faster]

There’s more to it than you think

Calculate Your Home Equity

Owning your own home brings so many great things together – a roof over your head, a place to raise a family, an investment vehicle, and a forced savings account that gives you financial security. Most homeowners achieve this financial security by creating home equity faster! 

 But did you know there are a few other ways of increasing your home equity faster without waiting for the market to increase your property’s value?

Today we’re going to cover 7 ways of creating home equity faster without waiting for the market to increase your property’s value. We will include case studies and one technique you can use today!

Table of Contents

What is home equity?

Home equity is calculated as the total value of your home minus your home loan. The equity in your home increases as you continue to pay down your loan. And if your property’s value increases, your equity also increases.

Home equity is more than just paying off your mortgage. It is an asset that you can borrow against and use for things like paying off other debt or paying your kids’ college education. Home equity loans are usually lower than credit or personal loans because the equity secures the loan.

Home Equity Asset
Home equity is an asset that you can use.

If you are borrowing to make improvements on your home, home equity loans can also be tax deductible.

Home Equity Calculator

Curious about how much home equity you have? Try this home equity calculator to see how much equity you have in your home.

Equity Calculator
Loan amount:
Property value:
Please make sure to have filled out all the input fields.
Current LVR: 0%
Max LVR: 0%
Equity Available: $X,XXX
By refinancing, you can access up to: $X,XXX
You can refinance and increase your home loan up to 90% of the value of your property in order to release $X,XXX in equity.
Unfortunately you cannot access your equity at this time unless you sell your property.
Disclaimer: This calculator is to be used as a guide to help you better understand your options. We have not assessed what options are suitable for your needs or if you meet other lending criteria that would allow you to access your equity. Any repayments quoted above are calculated using your current home loan balance over a term of 30 years. We strongly recommend that you make additional repayments and pay your loan off sooner. If you borrow over 80% of the property value then you may pay an LMI premium

7 Ways of Creating Home Equity Faster

1. Get another bank valuation

This is the simplest and most overlooked way of creating equity in your home. As we mentioned above, home equity is calculated as the value of your home minus any lending you owe against it. For example, if a bank values your home at $600,000 and you owe $450,000, the equity in your home is $150,000.

A bank valuation is different to a market valuation. A bank valuation helps the lender determine their overall risk on the property. In contrast, the market valuation, which a real estate agent can provide, can help determine the property’s price on the market.

Bank Valuation
A bank valuation is different to a market valuation.

If you are looking at borrowing your home equity, you are going to need to rely on a bank valuation – but the good news is different banks use different valuers.







Bank Valuation 1



Bank Valuation 2



Bank Valuation 3




As you can see from this scenario, we obtained 3 different bank valuations from 3 different banks, and the results are incredible – bank valuation 3 was over $130,000 HIGHER than the other ones completed.

 On the same property. At the same time. Just different bank valuers. You could create over $130,000 in equity just by looking at another bank. We can assist with arranging a free bank valuation; get in touch with us to arrange it.

 Read More: See ways to challenge a bank valuation

2. Put down a bigger deposit

Although not always possible, you can get equity from the very beginning by putting down a larger deposit. If you can get together more than a 20% deposit, you will avoid lenders mortgage insurance.

Create Equity In Your Home
There are lots of ways to create equity in your home.

Read More: On the opposite side, how to buy with no deposit at all?

3. Get a shorter loan term

This is one way to create some forced savings! By default, most banks will give you a 30-year mortgage term, and your repayments will be calculated assuming it will take you 30 years to pay off the loan…. But if you want to be able to pay off the loan faster and build your equity quicker, try reducing the loan term to 25 years or even 20.

The added benefit is that by having a shorter loan term, you will pay much less interest over the life of the loan, putting more cash into your pocket!


Home Loan Amount

Loan Term

Repayment per month

Interest Paid over life of loan.

Interest saving 





















As you can see from these figures, assuming an interest rate of 4.00%, you can save up to $174,000 by reducing the loan term and therefore build your equity much faster!

Read More: See if refinancing makes sense for you.

4. Fix up your property

Some simple cosmetic renovations can greatly impact your home’s equity position. But not all renovations improve your equity position, and spending money doesn’t necessarily increase value.

Jobs that tend to have a negative impact on a property’s value include poor landscaping, additions that don’t match the original building, creating dark rooms, over-renovating, appealing to the wrong crowd and not getting the appropriate council approvals.

Renovate your home
Renovating your home can increase your equity.

5. Pay more on your repayments

If you are not too keen on reducing the loan term, consider making smaller additional repayments to your home loan. This will help smash your loan and increase your home equity faster! You’ll be surprised what a huge difference small amounts can make to the overall interest costs.


Home Loan Amount

Loan Term

Repayment Per Month

Extra Payment per month

Interest Saved 

Time Saved









2 years 5 months






4 years 6 months






9 years






13 years 9 months 

As you can see, by making increased repayments, you can almost cut your loan term by half, saving 13 years and over $160,000 in interest costs, helping build that equity much faster!

Fortnightly repayments
Switching to fortnightly repayments means you make 2 extra fortnightly repayments a year.

A few simple tips to achieve this include:

  • Add a small extra amount to your monthly payment—Start small and increase over time. For example, if your monthly repayment is $2,148, add an extra $52 to round it up to $2,200. After this, you can slowly start to increase it over time.
  • Switch from monthly to fortnightly payment—Instead of $2,148 per month, make it $1074 per fortnight. As there are 26 fortnights per year and only 12 months, you will end up making 2 additional fortnightly repayments, cutting off years from your loan!
  • Try to schedule extra repayments automatically from your bank to your home loan account at regular intervals just after your payment goes in. This will mean you won’t have to actively remember to make the extra repayment, and you won’t be tempted to spend the money as it will be gone already.

Read More: ASIC Extra Mortgage Payment Calculator

6. Use bonuses and tax refunds

If you don’t want to put yourself under too big a financial commitment like reducing your loan to a 20, or 25-year term or increasing your monthly repayment, look for lump sums of money you receive each year – like bonuses and tax refunds. 

You can even use Christmas and birthday gifts (if you have some rich relatives.) if your gifts are non-monetary, you can stick them on eBay and put the cash into your home loan!

Any extra money added to the loan goes to reducing your loan principle and therefore reduces your interest bill!

Bonuses and tax refunds
You can use your employee benefits like bonuses and tax refunds to help pay down that loan quicker

7. Use one partner’s income

This is one my parents did back in the day, and it still works a treat today. Couples that want to get their home loan paid off super fast can dedicate one person’s income entirely to paying down the home loan and live off the second income. You might need to cut back on the smashed avo and late-night pizza, but it will help build that home equity way faster!

Use one partner's income
Using one partner's income to pay down the loan can help you build equity faster.

Bonus: How To Use The Equity In Your Home

You can use the equity in your home for the following:

  • Purchase another property. It’s unlikely that your first home is going to be your forever home. When you have equity in your home, you can sell your current home and upgrade to your ‘forever’ home. 

  • Renovate your house. It is possible to borrow against the equity in your home and use it to fix up your house.

  • Buy a boat or a car. Home loan interest rates are much cheaper than personal and car loans, so you could use the equity to buy a car or splurge on a boat. If it makes financial sense, you could look at using your equity to buy a boat or a car.
Use your equity
You can use your equity to buy a boat - if it makes financial sense.
  • Heaps of other stuff. From paying for your wedding expenses to investing in the stock market, if you have home equity, you have options!

  • Build, and increase your equity. Even better than using your equity, you could try to build it by following the steps in the previous section.

Next steps to get started with your home equity

Our team at Hunter Galloway is here to help you access home equity. Nathan & Joshua Vecchio are Senior Mortgage brokers who specialise in making your home journey easy.

Unlike other mortgage brokers who are just one-person operations, we have an entire team of experts to help make your home loan journey as simple as possible.

Home Loan Process Mortgage Broker Brisbane
The Hunter Galloway Mortgage Broker Brisbane team is here to help. We have a team of home loan experts.

If you want to get started, please call us at 1300 088 065 or book a free assessment online to see how we can help.

 Further reading:

Why Choose Hunter Galloway As Your Mortgage Broker?

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across Mortgage Brokers in Australia

Approximately 40% of home loan applications were rejected in December 2018 based on a survey of 52,000 households completed by 'DigitalFinance Analytics DFA'. In 2017 to 2018 Hunter Galloway submitted 342 home loan applications and had 8 applications rejected, giving a 2.33% rejection rate.
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