More homeowners tapping equity to fund renovations and purchases: NAB

author-avatar By
on June 30, 2022 Fact Checked
More homeowners tapping equity to fund renovations and purchases: NAB

According to NAB research, seven in 10 Aussies are using equity in their home to renovate or invest in property.

The survey of 500 showed that increases in property values empowered homeowners to use strong appreciation in home prices over the past two years to their advantage.

About four in 10 homeowners are taking the opportunity to get ahead on their loan repayments by either making larger or more frequent repayments or contributing lump sum payments. 

Additional data obtained from the report found mortgage holders aged 18-44 are more likely to get ahead on their loan repayments compared to those aged over 45 years. 

Approximately three in 10 Aussies whose home needs a makeover are unlocking their equity to conduct renovations on their property.

Those aged between 25-44 are more likely to renovate their home compared to homeowners aged 18-24. 

Whereas the age group most likely to invest their equity in superannuation are 45-54 year old's. 

Some of the other ways NAB customers are using their equity include buying an investment property with 16%; investing in shares, 12%; and adding it to their super, 8%. 

Andy Kerr, NAB Executive Home Ownership, said homeowners are trying to do everything they can to use their equity to get further ahead. 

“Customers are wanting more security and certainty, so it is not surprising in this environment of rate increases that we are seeing Aussies paying down their mortgages even further,” Mr Kerr said.

“We’re fielding more enquiries today about how to use equity than we’ve ever seen. And as hybrid working continues to evolve, many Aussies are taking the opportunity to build a new study or finally get that dream kitchen.”

Invoice financing grows despite supply chain constraints

Recent NAB data also shows the number of customers using invoice financing has grown by 22% over the past year.

Invoice financing allows businesses to borrow against unpaid customer invoices. 

Essentially, it helps them access cash quickly by unlocking funds with their unpaid invoices. 

Thirty per cent of the users of the invoice financing service are the wholesale and retail industry who are currently combating supply chain constraints. 

Michael Saadie, Executive Business Metro, said supply chain restrictions are one of the main issues businesses are having to deal with in the current market. 

“NAB’s invoice financing team has been busier than ever helping small and medium enterprises keep stock moving so that they can get paid for their goods sooner,” Mr Saadie said.

“When I’m talking to customers, many continue to report cash flow as one of their key challenges, as well as ongoing concern around skills shortages.

“When businesses have the cash to pay their invoices quickly, they can get stock sooner and ensure other important payments are made promptly such as their team’s salaries. Ultimately, the quicker a business gets cash in the door, the faster suppliers get paid and the faster our economy moves.”

See Also: Six Home Renovation Tips That Could Boost Your Home's Value


Advertisement

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Lender

Variable
More details
  • Min 30% deposit
  • No monthly or ongoing fees, add 0.10% for offset
  • Unlimited redraws

Variable Home Loan (LVR < 70%)

  • Min 30% deposit
  • No monthly or ongoing fees, add 0.10% for offset
  • Unlimited redraws
Variable
More details
REFINANCE ONLY
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
REFINANCE ONLY

Variable Rate Home Loan – Refinance Only

  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
NO ONGOING FEES
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
NO ONGOING FEES

Yard PAYG Home Loan (Principal and Interest) LVR ≤ 80%

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of August 11, 2022. View disclaimer.


Image by Harrison Astbury



Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

Latest Articles

author-avatar
Hanan joined Savings.com.au in 2022 as a finance journalist. With a keen interest in home loans, property investing, and money saving tactics, she is passionate about educating young Australians, like herself, on all things finance.

Be Savings smart.
Subscribe for free money newsletters.

By subscribing you agree
to the Savings Privacy Policy