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Can I pull equity out for a reno, and will the bank lend me the money for the work?
Bayley Clarke · Mortgage broker on the road · Last checked 1 September 2026 · 3 min read
The short answer
Yeah, generally. You can do a cash out. As long as your income supports the new loan amount, a lot of banks will let you do a cash out application, where we either increase your current loan or set up a separate loan that's purely for renovation money.
The condition is non-structural renovations: new kitchen, new bathroom, flooring, paint, outside area, landscaping. Anything structural, additions, knockdown rebuild, taking down walls, and the bank has more questions and you'll go down a different route for that money. Beyond that, it really comes down to the valuation.
The 90 second version. The rest of this page is the detail underneath it.
How a cash out works
A cash out is a loan increase secured against the equity you already have. As long as your income supports the new loan amount we're requesting, a lot of banks will let you do a cash out application. Either we increase your current loan, or we set up a separate split that is purely renovation money, which keeps it tidy.
The money lands in your account and you pay the tradies as the work happens. The bank isn't managing the build, which is exactly why it wants the work to be the simple kind.
Non-structural: the simple kind
Non-structural, as it is in the name, means you're not tearing down walls, adding extensions, or doing anything that significantly alters the layout and size of the property. For most people that's exactly what the reno is: new kitchen, new bathroom, flooring, paint, outside area, landscaping, whatever it may be.
For that, we simply do a cash out application, providing the property's value supports the money coming out and the loan stays under 80% of the value as a ratio. Above 80% means lenders mortgage insurance, which for most people won't make sense for a renovation.
Structural: the different route
Any time you're doing structural renovations, whether it's additions, a knockdown rebuild, taking down walls, anything like that, the bank is going to have a few more questions, and you'll need to go down a different route as far as getting money for those particular renos.
That usually means a construction-style arrangement, where the bank lends against the finished value and releases money in stages against the build. Different product, different paperwork, and a builder's contract in the mix. Still doable, just not a simple cash out.
The honest bit: the valuation decides, not the wish list
You can have a spotless income and a clear plan and still come up short, because the amount you can pull out is set by what the bank's valuer says the place is worth today, not by what it'll be worth when the kitchen is done. It just depends on the valuation, really.
That's the number I'd get first. Sometimes ordering a valuation with a different lender changes the answer entirely, because valuers disagree, and that's a legitimate reason to move banks.
Want to know how much the valuation would let you pull out?
A 30 minute call. What your place is likely to value at, how much sits under 80%, and whether your reno is the simple kind or the structural kind. Then we order the valuation that matters.
No cost to you. The bank pays me when a loan settles. ยท How I get paid
Next question
Why doesn't my equity count as borrowing power?The income test that sits underneath every cash out.
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