Refinancing to cash out for renovations in Melbourne
Dreaming of a new kitchen, an extension or a second bathroom? A cash-out refinance for renovations in Melbourne lets you tap the equity in your home to fund the work — often at a far lower rate than a personal loan or credit card.
What a cash-out refinance actually means
A cash-out refinance replaces your existing home loan with a larger one, and you take the difference as cash to pay for your renovation. Because it's secured against your property, the rate is usually much lower than unsecured finance.
In Melbourne, where property values have grown strongly in many suburbs, plenty of owners are sitting on equity they didn't realise they could use.
How much equity can you access?
Most lenders let you borrow up to 80% of your property's value without lenders mortgage insurance. Your usable equity is that 80% figure minus what you still owe.
For example, if your Melbourne home is worth $900,000 and you owe $400,000, 80% is $720,000 — meaning up to around $320,000 of equity may be available, subject to your borrowing capacity.
What lenders ask for renovation cash-out
For smaller cosmetic renovations, many lenders simply release the cash with minimal questions. For larger amounts, they may ask what the funds are for, and sometimes for quotes or plans.
A broker knows which lenders are easiest for cash-out and how to present your request so it's approved smoothly.
The costs to weigh up
Cash-out refinancing comes with the usual refinance costs — discharge fees, possible application and valuation fees, and registration fees. You're also increasing your loan, so your repayments rise.
The upside is that quality renovations can add more value to your home than they cost, while spreading the expense over your mortgage at a low rate.
Is cash-out the right move for your renovation?
Cash-out works best for substantial, value-adding projects. For very small jobs, a redraw or offset may be cheaper than restructuring your whole loan.
A XLOANS broker will compare cash-out, construction loans and other options so you fund your renovation the smartest way — and only refinance if it genuinely stacks up.
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Frequently asked questions
This page is general information only and not financial advice. Lending criteria, rates and government schemes change — speak to a XLOANS broker for advice tailored to your situation. XLOANS is a Melbourne-based mortgage broking service.
Planning a renovation in Melbourne?
A XLOANS broker will show how much equity you can access and the cheapest way to fund it — free, in a quick chat.