Equity on Fixed Loans? Unlock Options Fast (2026)

Are you considering tapping into the equity of your home but currently locked into a fixed-rate loan? You're not alone. Many Australians find themselves in a similar situation, wanting to leverage their property's value for renovations, investments, or debt consolidation. The good news is that using equity on a fixed loan is possible, though it comes with specific considerations and strategies. Let's explore how you can make the most of your property's equity even with a fixed-rate mortgage.

Understanding Equity and Fixed Loans

Equity represents the difference between your property's current market value and the remaining balance on your mortgage. It's essentially the portion of your home that you own outright. For example, if your property is valued at $800,000 and your mortgage balance is $500,000, you have $300,000 in equity.

Fixed-rate loans, on the other hand, offer borrowers the stability of knowing exactly what their repayments will be over a set period, typically ranging from one to five years. While this can provide peace of mind against fluctuating interest rates, it also comes with limitations, especially when you want to access your equity.

Accessing Equity on a Fixed Loan: Rates, Requirements, and Options

When considering using equity on a fixed loan, it's crucial to understand the current market environment. As of 2026, interest rates in Australia for fixed loans typically range between 6.49% and 12%. The actual rate you'll be offered depends on several factors, including your credit score, loan-to-value ratio (LVR), and the lender's policies.

Most lenders require a minimum of 20% equity in your home before you can borrow against it. This means if your property is worth $800,000, you should ideally owe no more than $640,000 to access additional funds. However, early exit or break fees for fixed loans can be a significant consideration. These fees are incurred if you refinance or pay off your fixed loan early to access equity.

Let's take a closer look at how your options might compare:

Steps to Access Equity on a Fixed Loan

Here's a step-by-step guide to accessing your equity:

1. Assess Your Equity: Determine how much equity you have in your home. A property valuation might be necessary.
2. Understand Break Fees: Contact your lender to understand potential break fees if you refinance your fixed loan.
3. Explore Options: Consider the alternatives such as refinancing to a variable rate, a top-up loan, or a second mortgage.
4. Consult a Mortgage Broker: Seek advice from a professional, like those at Esteb and Co, who have access to over 83 lenders and can tailor solutions to your needs.
5. Apply for the Loan: Once you've chosen the best option, proceed with the application through your chosen lender.
6. Use Your Funds Wisely: Ensure the funds are used for the intended purpose, whether it's home improvement, investment, or other financial goals.

Tips and Considerations

• Long-Term Impact: Consider how accessing your equity will affect your financial situation in the long term, including your retirement plans.
• Interest Rates: Keep an eye on interest rate trends. Even if you opt for a variable loan, rate changes can impact your repayments.
• Professional Advice: A mortgage broker can provide invaluable advice and access to a wide range of lenders, ensuring you get the best deal possible.
• Tax Implications: If using equity for investment purposes, be aware of potential tax implications and consult with a tax advisor.
• Review Regularly: Regularly review your mortgage and equity position to ensure it remains aligned with your financial goals.

Frequently Asked Questions

Can I use equity if my loan is fixed?

Yes, you can use equity on a fixed loan, but you may face break fees if you refinance. Consider options like a top-up loan or second mortgage.

What are break fees?

Break fees are charges imposed by lenders when you exit a fixed-rate loan early. These fees can vary significantly based on your loan terms.

How much equity do I need to access it?

Most lenders require you to have at least 20% equity in your home before you can borrow against it.

What is a top-up loan?

A top-up loan allows you to borrow additional funds on top of your existing mortgage without refinancing your entire loan.

Is refinancing to a variable loan a good option?

Refinancing to a variable loan can provide flexibility and avoid break fees, but it exposes you to interest rate fluctuations.

Can Esteb and Co help me with this process?

Yes, Esteb and Co can assist you in accessing equity on a fixed loan by leveraging their extensive panel of over 83 lenders to find the best solution for your needs.