If you’ve built up equity in your home, you might be wondering how to access it—whether it’s to pay off debts, fund your retirement, or unlock cash for new opportunities. Fortunately, there are several options available, each with its own pros and cons depending on your financial situation, lifestyle, and future plans.
Below, we explore five of the most common ways to access home equity—including an innovative option offered by RealFuture that lets you unlock cash without selling or taking on debt immediately.
1. Refinance with a Traditional Home Loan
One of the most common ways to access equity is through a home loan or mortgage from a bank or lender. This option typically requires regular income to meet monthly repayments, which include both interest and a portion of the original loan amount.
Over time, you repay the loan in full, and the mortgage is discharged. This approach may suit homeowners who are still working and can manage the ongoing financial commitment.
2. Use a Reverse Mortgage (For Retirees)
A reverse mortgage is often available to retirees who no longer earn a regular income. With this option, you borrow against the value of your home but don’t need to make regular repayments.
Instead, the loan is usually repaid when the home is sold—either voluntarily or when you pass away or move into aged care. While it offers short-term financial relief, be mindful that interest compounds over time and reduces the final value of your estate.
3. Join a Home Share Scheme
A home share scheme allows you to sell a percentage of your home’s value to a private company in exchange for cash. For example, you might sell a 30% share of your home for 20% of its current market value.
Later, when you sell your home, the company receives its agreed share of the sale price—often a larger percentage than the cash originally received. This arrangement can become more costly the longer you hold the property.
4. Downsize Your Property
Downsizing—selling your current home and buying a smaller or lower-cost property—can help you unlock equity. This approach is popular with retirees or empty nesters looking to simplify their lifestyle.
However, keep in mind that selling and buying both come with significant transaction costs like real estate agent fees, stamp duty, legal fees, and moving expenses, which can reduce the net equity you unlock.
5. Enter a Long-Term Property Settlement with RealFuture
A Long Term Settlement, available through RealFuture.com.au, offers a unique alternative to traditional equity release options. It allows you to sell your property with a long settlement period and stay in your home for up to 36 months, while immediately accessing 10% of the home’s agreed value in cash.
Key Benefits of a Long Term Settlement:
- Access cash without taking out a loan or paying interest.
- Stay in your home for 12 to 36 months, giving you time to plan your next move or transition at your own pace.
- No pressure from short-term settlement timelines (like 30/60/90 days) or having to rush into your next living arrangement.
This option is especially appealing to homeowners looking to:
- Free up funds for debt consolidation, travel, or retirement goals
- Transition to a new home with less financial pressure
- Maintain control over their timeline while unlocking a portion of their home’s value
Which Option Is Right for You?
Choosing how to access the equity in your home depends on your financial situation, life stage, and future plans. Whether you’re looking to downsize, refinance, or explore innovative alternatives like RealFuture’s long-term settlement model, it’s important to weigh the costs, timelines, and lifestyle implications of each approach.
To learn more about Long Term Settlements, visit RealFuture.com.au or reach out to speak with our team.
