Property prices in Australia have been constantly increasing in the past few years, helping most property owners build some equity in their property without doing anything. However, no one can predict which way the market would swing and it is always prudent to actively seek ways to increase the value of your house.

Equity is the difference between the market value of your house and the amount you still owe on your home loan. For example, if the market value of your home is $650,000 and you owe $300,000 on your home loan, your equity in the property is $350,000.


While equity gradually increases with time as you continue paying off your mortgage, building the equity in your home faster can provide you an invaluable source of cash that you can dive into anytime to build your property portfolio further or meet any emergencies.

Here are some ways to build the equity in your house faster:

1. Pay your home loan faster: Each mortgage repayment that you make is applied towards paying off the interest and principal on your home loan. Especially at the start, a larger part of the repayment is applied towards paying off the interest. Thus, by increasing your repayment amount or the number of repayments you make, you can effectively pay more of the principal amount, bringing down the interest payable apart from building equity in your home.

“Sometimes, home buyers fall for the cheapest loan options compromising on essential home loan features such as having an offset account, free additional repayments or extra repayments and even redraws at no cost. Having the ability to make extra repayments for free not only allows you to utilise your annual bonus or any windfall income productively, it helps you build equity faster in your home,” explains Collins Mayaki a mortgage broker at HashChing.

Here are some simple ways to pay your home loan faster:

  • Pay extra – Paying something extra each month or applying your yearly bonus or tax refund as a lump sum payment towards your home loan can help pay off your mortgage faster.

  • Make additional repayments – Instead of making 12 monthly repayments, start paying fortnightly. This will add up to 26 fortnightly payments over the year or 13 monthly repayments!

Use our lump sum calculator and extra repayments calculator to see how additional repayments will substantially reduce your debt as well as years from the life of your home loan.

2. Take up smart renovation projects:

Renovations can increase the value of your property if they are well thought out. But, often, home buyers choose renovations that appeal to them over those that will add value to the property. However, when you want to increase the value of your house, it is important to think from the buyers’ perspective as well – adding an extra room, bathroom, upgrading the kitchen, creating an outdoor seating or even building a granny flat can increase the value of your house substantially.

However, upgrading the kitchen when the washroom is rundown will not do much good as the house will overall look shabby. Instead of expensive upgrades, choose mid-range equipment and create a standard look throughout the house for better value.

Here’s a helpful article on renovations that are easy on the pocket and add much value to your house.

Your home is an invaluable asset and the equity in your home can be used for several purposes from renovating your house (and further building the equity!) to buying another one to even supporting your lifestyle. Contact a mortgage broker for the best home loan deals on your property so that you not only have a lower interest rate (compare interest rates online) but all the essential features in your home loan to help you build equity faster.


By Vidhu Bajaj


HashChing is helping Australians by providing access to the pre-negotiated home loan deals. Obligation free consultation with one of our partner brokers might save you time, hassle and money.