HLG030 Using your equity to build wealth (505 words)

This article explains how equity is accumulated and ways in which you can use some of your equity to build additional wealth. It explains there are risks when using your equity and suggests working with the right professionals to get a desired result.

The equity you have in your home is simply the difference between the current market value of your home and the amount you still owe on your home loan. For example, if your home is worth $800,000 and your outstanding loan balance is $200,000, your equity is $600,000.
Your equity increases as home loan repayments reduce your loan balance or whenever your property increases in value. While you can’t control the property market, the more that you can pay off your home loan the quicker you build equity.