Do you know how to access equity without selling?

You can access the equity in your home without selling by refinancing your mortgage and increasing your loan amount.

Many clinical pharmacists build significant equity over several years, particularly those who purchased before recent price growth or who have consistently made repayments above the minimum. That equity sits locked in the property until you either sell or deliberately extract it through a refinance. The process involves your lender reassessing your property value, confirming your current borrowing capacity, and increasing your loan to release the difference as usable cash.

How equity release through refinancing works

Equity is the difference between what your property is worth today and what you still owe on your mortgage. When you refinance to access equity, the lender orders a new valuation, calculates how much you can borrow against that updated value, and advances the additional funds at settlement. Most lenders will allow you to borrow up to 80% of the property value without paying lenders mortgage insurance, though some will extend to 90% or even 95% depending on your occupation and the lender's policies.

Consider a clinical pharmacist who purchased a property seven years ago with a loan of $450,000. The property has since increased in value and now sits at around $650,000, while the remaining loan balance is $380,000. That leaves $270,000 in equity. Borrowing up to 80% of the current value would allow a total loan of $520,000, meaning this pharmacist could access $140,000 in cash while staying within standard lending limits. The additional amount is paid out at settlement and can be used for any approved purpose, whether that is purchasing an investment property, funding renovations, or consolidating other debts.

When refinancing to access equity makes sense

Refinancing for equity release is most useful when you have a specific purpose that will either generate income, reduce overall interest costs, or add value to your financial position. Accessing equity to purchase an investment property lets you build a portfolio without needing to save another full deposit. Using equity to fund renovations can increase the value of your home and improve your living situation. Consolidating high-interest debts like credit cards or car loans into your mortgage can reduce your monthly outgoings and simplify repayments.

In our experience, clinical pharmacists often refinance to access equity when transitioning from full-time hospital or clinical work to consulting or contracting roles. The equity provides a buffer during the transition or funds the setup costs for a new working arrangement. Others use it to help adult children with their own property deposits or to cover education costs that would otherwise go on a credit card or personal loan.

The application and valuation process

The refinance application follows a similar path to your original home loan, though it is typically faster because you already own the property. You will need to provide current income documentation, usually your two most recent payslips if you are permanently employed or tax returns and notice of assessments if you have moved into consulting. The lender will also request updated statements for any other debts, superannuation, and savings accounts to confirm your financial position has not deteriorated since your original loan.

Once the application is submitted, the lender arranges a property valuation. In most cases, this is a desktop valuation where the valuer reviews recent sales in your area without physically inspecting the property. If the property is unusual, in a regional location, or if the requested loan amount is large, the lender may require a full inspection. Valuation outcomes can vary, and in a cooling market, the figure may come in lower than you expected. If that happens, you may need to reduce the amount you are seeking or provide additional documentation to support a higher value.

Structuring your loan after accessing equity

How you structure your loan after accessing equity depends on what you are using the funds for. If you are using the equity to purchase an investment property, you will want to keep that portion of the debt separate so the interest remains tax-deductible. This usually means splitting your loan into two accounts: one for the original owner-occupied debt and one for the investment-related portion. The same principle applies if you are using the funds for any income-producing activity.

If you are using the equity for renovations on your primary residence or for personal purposes like debt consolidation, the entire loan remains non-deductible and can be managed as a single account. In that case, you might consider keeping the loan structure simple and focusing on features like an offset account or redraw facility to manage your cash flow. Some clinical pharmacists prefer to lock in part of the new loan on a fixed rate if they are concerned about future rate movements, particularly if the borrowed amount is significant and repayment stability is a priority.

Costs involved in refinancing for equity release

Refinancing is not without cost, though the expense is often manageable compared to the equity you are releasing. You will typically pay a discharge fee to your current lender, application or establishment fees to the new lender, valuation fees, and settlement costs including legal fees. In total, these costs usually range between $1,500 and $3,000 depending on the lender and the complexity of your loan. Some lenders will capitalise these costs into the new loan rather than requiring upfront payment.

You should also check whether your current loan has any break costs, particularly if you are still within a fixed rate period. If you are coming off a fixed rate and moving to a new lender, the timing can work in your favour, as you avoid penalty fees. If you are breaking a fixed term early, the costs can be substantial depending on how much time remains and how far rates have moved since you locked in. Your broker can request a break cost estimate from your current lender before you proceed, so you know the full picture before committing.

Borrowing capacity and serviceability considerations

Accessing equity increases your overall loan amount, which means you need to demonstrate that you can service the higher debt. Lenders assess this using your income, existing expenses, and any other loan commitments. For clinical pharmacists on a permanent salary, this is usually straightforward, as your income is stable and your employment is considered secure. If you have recently moved to a consulting or contracting role, lenders may take a more cautious view, particularly if your income fluctuates or if you have been in the role for less than 12 months.

If your borrowing capacity is tight, you may not be able to access the full amount of equity available without exceeding the lender's serviceability limits. In that scenario, you might need to reduce the amount you are requesting, consider a longer loan term to reduce repayments, or look at lenders with more flexible serviceability policies. Some lenders also allow you to use rental income from the property you are purchasing with the released equity to support your application, which can improve your borrowing position if you are buying an investment property.

Refinancing vs staying with your current lender

You do not necessarily need to change lenders to access equity. Your current lender may be willing to increase your loan and release the funds without requiring a full refinance. This is sometimes referred to as a top-up or equity release within your existing facility. The advantage is that the process is often quicker and may involve lower costs, as you avoid discharge fees and some of the paperwork involved in switching lenders.

The downside is that your current lender may not offer the most competitive rate or the loan features you now need. If your loan has been in place for several years, you may be on a rate that is higher than what is currently available to new borrowers. In our experience, many clinical pharmacists find that refinancing their home loan to a new lender not only unlocks the equity they need but also reduces their interest rate and improves their loan structure, making the effort worthwhile even when factoring in the associated costs.

Call one of our team or book an appointment at a time that works for you. We will review your current loan, confirm how much equity you can access, and structure the refinance in a way that fits your circumstances and the purpose you have in mind.

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