Loan Top Ups

If your home has increased in value since you bought it, or you have built up equity in it, you could borrow more money to, for example, fund home improvements or refurbishments or to raise a deposit for a holiday home, or perhaps as a rental investment property.

You can also top up your home loan to consolidate your debts and pay them off as a single loan, a mortgage over your homewill almost always be cheaper than short-term loans or hire purchases.

Some lenders will also offer specials if your top up is to pay for energy systems such as solar panels.

Increasing your mortgage for home improvements might also add value to your property.

To top up your mortgage you’ll need to have existing equity in your property, or be able to create more equity by using the funds from the top-up to create it. There is usually a minimum top up amount of (for example) $5,000.

A top-up can be added to your existing home loan,or taken out as an additional loan. Any time you increase your mortgage it makes sense to review your overall lending.

The amount you are able to borrow depends on:

• what the top-up is for
• how much of your home loan you’ve already paid off
• the value of your home and what your Loan to Value Ratio (LVR) is
• if you can afford the repayments of the new home loan amount(s) once you’ve added your top-up amount
• The bank or funder where you have your lending

There are many variables when it comes to increasing your mortgage and the bank will look at more than the amount you are applying for as a top-up. They will look at the total of all the borrowing you currently have with them when making a decision about whether to lend you any more.