Refinancing to access equity gives you a way to fund education costs without drawing down on savings or taking on unsecured debt at higher rates.
Many aged care pharmacists use equity in their home to pay for postgraduate study, courses in clinical governance or palliative care, or to support children through university. The same approach works whether you're funding your own professional development or covering school fees and tutoring for your family. The loan amount increases, the funds are released at settlement, and repayments adjust to reflect the new balance.
How equity release through refinancing works
You borrow against the portion of your property you own outright. Most lenders allow you to access up to 80% of your property's current value, minus what you still owe. The difference between what you owe now and what you can borrow is your available equity.
Consider a pharmacist working in residential aged care who owns a property valued at $700,000 with $300,000 remaining on the mortgage. At 80% of the property's value, the maximum loan would be $560,000. Subtracting the existing $300,000 debt leaves $260,000 in accessible equity. If they need $60,000 for a Master of Clinical Pharmacy, the new loan balance would be $360,000. The funds are paid out at settlement, and the monthly repayment increases to reflect the additional amount borrowed.
This approach keeps education costs within the mortgage, where the rate is lower than most personal loans or credit cards. It also means you're not liquidating offset balances or term deposits that might be earning returns or providing a buffer for other expenses.
When refinancing makes more sense than other funding options
Refinancing works when the cost of increasing your mortgage is lower than the alternatives. Education loans and payment plans often carry rates above 6% or 7%, and some postgraduate courses require upfront payment to secure enrolment.
Equity release through your mortgage typically sits at whatever your home loan rate is, whether variable or fixed. If your current loan is on a higher rate and you're refinancing anyway, you can address both the rate and the equity access in one application. That's particularly relevant for aged care pharmacists who locked in fixed rates during the low-rate period and are now coming off those terms.
The other advantage is repayment flexibility. Most home loans allow extra repayments without penalty on the variable portion, so if you receive a bonus, sell an investment, or finish paying school fees, you can reduce the balance ahead of schedule. That's not always possible with structured education loans.
Structuring the loan to match your income pattern
Aged care pharmacists often work a mix of full-time, part-time, and casual shifts depending on the facility and roster. If your income fluctuates or you're planning a shift in hours to complete study, you'll want a loan structure that accommodates that.
An offset account attached to the new loan allows you to park any lump sums, locum payments, or unused funds without locking them into the mortgage. Interest is calculated daily on the net balance, so even short-term deposits reduce what you're paying. A redraw facility does something similar but usually requires a formal request to access funds, whereas an offset works like a transaction account.
If you're refinancing to fund your own education and expect to reduce hours temporarily, consider whether you need a period of interest-only repayments while you complete the course. That lowers the monthly commitment during study and gives you the option to return to principal and interest repayments once your income stabilises. Not all lenders offer this without a specific investment property rationale, but some will approve it for professional development that's likely to increase your earning capacity.
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Book a chat with a Finance & Mortgage Broker at Pharmacist Home Loans today.
What lenders look at when you're accessing equity for education
Lenders assess the refinance application the same way they would any other loan increase. They'll want to see that your income supports the new repayment, that you have a history of meeting your current mortgage commitments, and that the property value justifies the amount you're borrowing.
For pharmacists employed in aged care, income verification usually involves payslips, tax returns, and a letter from your employer if you've recently changed facilities or moved from a hospital role. If you're working across multiple sites or picking up agency shifts, the lender will average your income over the most recent financial year. Some lenders are more familiar with health sector employment structures and will assess your application with less back-and-forth.
The property is revalued as part of the refinance process, either through a desktop valuation or a physical inspection depending on the lender and the amount being accessed. If you've made improvements since you bought the property or if the local market has moved, the updated valuation might give you more equity than you expected.
Taxation and how education expenses are treated
Whether education expenses are deductible depends on the connection between the course and your current role. If you're completing a qualification that maintains or improves skills you already use, such as a course in pharmacotherapy for aged care or clinical governance, the expense is usually deductible. If the course enables you to move into a new field or is only generally related to your profession, it's typically not.
The interest you pay on the portion of the loan used for deductible education is also deductible. That means if you borrow $60,000 for a postgraduate qualification and the course fees are deductible, the interest on that $60,000 becomes a claimable expense. You'll need to keep records that separate the education-related borrowing from the rest of your mortgage, and it's worth speaking to an accountant before you lodge your return.
If you're funding your children's education rather than your own, the interest isn't deductible because the expense is private. The loan structure stays the same, but the tax outcome is different.
How long the refinance application takes
Most refinance applications are assessed within a week if the documentation is complete. Settlement usually occurs two to four weeks after approval, depending on the lender and whether the property valuation requires a physical inspection.
If you're refinancing to meet a specific enrolment deadline or fee payment date, let your broker know upfront so they can prioritise lenders with shorter processing times. Some lenders will fast-track applications if there's a time-sensitive element, but that's not guaranteed.
Once the loan settles, the equity is released and can be transferred to your transaction account or paid directly to the education provider. If you're funding multiple years of study, consider whether you want to draw down the full amount at once or structure the loan so you only access what you need each year. The latter approach keeps your loan balance lower and reduces the interest you're paying on funds that aren't yet required.
Refinancing to fund education doesn't lock you in long-term
One concern pharmacists raise is whether accessing equity now will limit their options later. The reality is that refinancing to fund education is a decision you can reverse or adjust as your circumstances change.
If you complete your study and decide to sell the property, the loan is paid out and any remaining equity is yours. If your income increases after you finish the course and you want to reduce the loan balance quickly, most variable rate loans allow unlimited extra repayments. If you're planning to buy an investment property or upgrade your home in a few years, the fact that you've accessed equity for education doesn't prevent you from borrowing again, provided your income supports the repayment and you still have equity available.
The key is to structure the loan in a way that aligns with your current needs without assuming your circumstances will stay the same indefinitely. That's where working with a broker who understands how aged care pharmacy roles and income structures are assessed makes a measurable difference.
Call one of our team or book an appointment at a time that works for you. We'll review your current loan, calculate your available equity, and walk through the options that match your timeline and funding needs.
Frequently Asked Questions
How much equity can I access through refinancing for education costs?
Most lenders allow you to borrow up to 80% of your property's current value, minus what you still owe. The difference is your available equity. For example, if your property is valued at $700,000 and you owe $300,000, you could access up to $260,000.
Is the interest on education borrowing tax deductible?
Interest is deductible if the course maintains or improves skills you use in your current role, such as aged care pharmacotherapy or clinical governance. If you're funding your children's education, the interest is not deductible because the expense is private.
How long does it take to refinance and access equity?
Most applications are assessed within a week if documentation is complete. Settlement typically occurs two to four weeks after approval, depending on the lender and whether a physical property valuation is required.
Can I access equity in stages rather than all at once?
Yes, you can structure the loan so you only draw down what you need each year. This keeps your loan balance lower and reduces the interest you pay on funds that aren't yet required.
Will accessing equity now limit my borrowing capacity later?
Not necessarily. You can reverse or adjust the decision as your circumstances change. If your income increases after completing study, you can make extra repayments to reduce the balance and restore equity for future borrowing.
