Refinance to Access Equity for Education Costs

Your property probably has tens of thousands sitting in it that you can use without selling.

If you bought five years ago or paid down your mortgage, you've built equity. Refinancing lets you pull that out as cash while keeping your property. For bricklayers looking at TAFE courses, apprenticeship tools, or school fees, this can make more sense than running up credit cards or taking out personal loans at double the interest rate.

What Is a Cash Out Refinance

A cash out refinance replaces your current mortgage with a larger loan. You pocket the difference between what you owe now and what you borrow. The equity release comes as a lump sum that you can spend on whatever you need, including education.

Consider a bricklayer in Penrith who owes $320,000 on a property now worth $550,000. The lender will let you borrow up to 80% of the property value, which is $440,000. After paying out the existing $320,000, you'd have $120,000 available. That's enough to cover a trade qualification upgrade, buy all the equipment for a son or daughter starting a bricklaying apprenticeship, or pay for private school fees through to Year 12.

How Lenders Calculate What You Can Access

Lenders look at your property value and loan amount. Most will lend up to 80% of your property's current value without charging Lenders Mortgage Insurance. If your property is worth $500,000, you can borrow up to $400,000. Subtract what you still owe, and what's left is yours to access.

Your income still matters. The lender needs to see that you can service the higher loan. As a bricklayer, that means showing consistent income over the past year or two. If you're self-employed, they'll want tax returns or BAS statements. If you work for a building company, payslips will do. The calculation is the same as any home loan: they want to know you can afford the repayments without going broke.

Property valuations determine how much equity you have. Lenders usually organise their own valuation, which might come back lower than what you'd get on the open market. In suburbs like Campbelltown or Blacktown where older fibro homes sit next to new builds, valuers can be conservative. If the valuation comes in short, you'll have less equity to access.

When This Makes Sense for Tradies

Pulling equity for education works when the cost is significant and the payoff is clear. Upgrading from a bricklaying labourer to a qualified bricklayer can add $20,000 to $30,000 a year to your income. Paying $15,000 for a qualification through TAFE or a private provider is a straight swap: spend now, earn more later.

School fees are different. If you're paying $25,000 a year for private schooling and tapping equity to cover it, you're adding to your mortgage for something that won't generate income. That doesn't make it wrong, but it does mean your repayments go up permanently while your income stays the same. Run the numbers before you commit.

In a scenario like this, a bricklayer in Western Sydney might owe $280,000 on a property worth $620,000. They want to access $50,000 to cover three years of school fees for two kids. The new loan would be $330,000, which adds roughly $290 a month to the repayment at current variable rates. That's manageable if work is steady. If you're in and out of jobs or rely on seasonal work, it's a risk.

Why Interest Rates Matter When You Refinance

When you refinance your home loan, you're not just accessing cash. You're also resetting your interest rate. If you're stuck on a rate from three years ago that's higher than what's available now, refinancing can lower your repayments even after you've increased the loan amount.

Check what rate you're paying. If it's above what new borrowers are getting, switching lenders while you access equity can keep your repayments close to where they are now. If your current rate is already low, pulling out $50,000 might still be cheaper than a personal loan, but don't expect your monthly payment to stay the same.

Some bricklayers coming off a fixed rate period find themselves on a variable rate that's climbed since they locked in. If your fixed rate is ending, refinancing to access equity at the same time lets you shop around for a lower rate and pull out cash in one transaction instead of two.

What the Refinance Process Involves

The refinance application asks for the same documents as your original home loan. Income proof, ID, and a statement of what you want the money for. Lenders want to know you're using it for something legitimate, not gambling or paying off debts you've racked up elsewhere. Education is straightforward. Just tell them what it's for.

Property valuation happens next. The lender sends someone out or uses an online valuation tool. This takes a week or two. Once they've confirmed the value, they'll tell you how much you can borrow. If it's enough, you keep going. If it's not, you either reduce what you're asking for or look at other options.

Settlement takes four to six weeks from application to cash in your account. If you need the money sooner, say that upfront. Some lenders move quicker than others, and if you're paying a TAFE course deposit or school fees by a set date, timing matters.

How This Compares to Other Borrowing Options

Personal loans charge higher interest rates than home loans. A personal loan for $30,000 might cost you 10% to 14% depending on your credit. A home loan sits closer to half that. Over five years, the difference is thousands of dollars. If you've got equity sitting in your property, using it will cost you less.

Credit cards are the worst option. If you're putting $20,000 of school fees or trade course costs on a card at 20% interest, you'll pay it off for years. Refinancing to access equity at a lower interest rate and paying it off as part of your mortgage keeps the cost down.

The downside is that you're securing the debt against your home. If you can't make the repayments, the lender can sell your property. A personal loan or credit card doesn't have that risk. For education costs that improve your earning capacity or give your kids a solid start, most bricklayers are comfortable with that trade-off. For something less certain, think twice.

Call one of our team or book an appointment at a time that works for you. We'll look at your property value, what you owe, and what you can access without putting yourself under the pump.

Frequently Asked Questions