Home Improvement Renovation Loan Eton

Unlocking Equity to Secure Finance to Renovate and Build

Case Study: Mortar Finance Helps Eton Family Unlock Equity for Major Home Improvements

For many Australian homeowners, renovating an existing home is often a smarter financial decision than selling and buying again, particularly in a rising property market. With increasing property values, higher stamp duty costs, and limited housing supply, upgrading a current home can deliver greater long-term value while allowing families to remain in the community they love.

That was precisely the situation facing Mitch, a self-employed business owner from Eton, Queensland. His family home no longer met their evolving lifestyle needs, and he wanted to undertake significant improvements, including constructing a large storage shed and completing extensive upgrades throughout the property.

The challenge was accessing sufficient equity while navigating the complexities of self-employed lending. Through strategic lender selection and specialist alternative documentation lending, Mortar Finance successfully refinanced Mitch’s existing home loan and secured $370,000 in equity release, allowing the family to transform their property without the expense and disruption of moving.

Understanding the Client’s Goals

Mitch approached Mortar Finance seeking a refinance that would provide greater flexibility while unlocking equity from his existing home.

His funding requirements included:

• Refinancing his existing home loan of $250,000.
• Releasing $370,000 in equity.
• Total finance of $640,000.

The additional funds would be used to construct a large storage shed and complete substantial improvements designed to enhance both the functionality and liveability of the property.

Rather than entering the highly competitive property market to purchase another home, Mitch wanted to invest in the property his family already loved. By renovating instead of relocating, he could avoid significant transaction costs such as stamp duty, legal expenses, agent commissions, and the higher purchase prices associated with buying another family home in the current market.

The Lending Challenge

Although Mitch had built considerable equity in his property, obtaining finance was not straightforward.

As a self-employed business owner, his circumstances required a far more specialised lending approach than a standard PAYG borrower.

His business had recently celebrated its two-year ABN milestone, however the lodged financial statements did not accurately reflect the company’s current trading performance.

Like many growing businesses, the earlier financial years included establishment costs and reduced profitability while the business gained momentum.

By contrast, more recent financial information—including Business Activity Statements (BAS), interim financials and director wage evidence, demonstrated that the business had become consistently profitable with strong ongoing cash flow.

Had Mitch relied solely on traditional tax return assessment, his borrowing capacity would have been significantly understated.

Even more importantly, waiting for another full financial year to be completed, lodged and assessed would likely have delayed the project by six to seven months.

Developing a Tailored Lending Strategy

Recognising these challenges, Mortar Finance designed a customised alternative documentation lending strategy that reflected Mitch’s actual business performance rather than relying exclusively on historical tax returns.

The objective was to maximise borrowing capacity while ensuring the lender could accurately assess the business’s current financial strength.

This approach provided a far more realistic representation of Mitch’s servicing capacity and enabled the project to move forward immediately rather than waiting for future tax lodgements.

Selecting the Right Lender

After assessing numerous lending options, Mortar Finance selected AFG Bright as the preferred lender.

AFG Bright offered a competitive alternative documentation lending solution that aligned perfectly with Mitch’s circumstances.

While many alt-doc lenders charge percentage-based risk fees that can substantially increase borrowing costs, AFG Bright’s pricing structure avoided these additional charges, delivering a more cost-effective outcome for the client.

The refinance also repositioned the existing mortgage, enabling the property to be used for both refinancing and equity release.

An additional advantage of the selected lender was its flexible policy regarding equity access, allowing Mitch to control the released funds without requiring extensive evidence supporting every aspect of the proposed cash-out purpose.

Importantly, Mitch’s existing lender simply could not accommodate the alternative income assessment methodology required to accurately assess his financial position, making refinancing essential to achieving the desired outcome.

Managing the Approval Process

Mortar Finance proactively managed every stage of the application to minimise delays and maximise approval confidence.

This included working closely with Mitch’s accountant to develop a comprehensive understanding of the business’s profitability and financial performance.

The application incorporated:

• Current BAS statements.
• Interim financial reports.
• Director wage evidence.
• Details of ongoing works in progress.
• Existing contracted business activity.
• Forward-looking income projections.

These documents provided the lender with confidence that the business’s recent performance represented sustainable long-term income rather than temporary growth.

Mortar Finance also arranged an independent valuation of the rural property before formally lodging the application, accurately determining the available usable equity and eliminating uncertainty during assessment.

Before submission, the entire lending scenario was thoroughly pre-qualified with the lender to ensure policy alignment and reduce the likelihood of unexpected conditions or delays.

Delivering an Outstanding Result

Through careful planning, specialist lender knowledge and proactive application management, Mortar Finance successfully delivered a funding solution that exceeded the client’s expectations.

The completed refinance enabled Mitch to:

• Refinance his existing mortgage into a more suitable lending structure.
• Access $370,000 in usable equity.
• Construct a large storage shed to improve property functionality.
• Complete significant home improvements without selling the family home.
• Avoid lengthy delays associated with traditional tax-return lending assessments.
• Secure finance based on current business performance rather than outdated historical figures.
• Retain ownership of a property that better suited his family’s long-term lifestyle.

Helping Families Build a Better Future

This case study demonstrates how specialist mortgage brokers can create tailored lending solutions that go well beyond simply arranging finance.

For self-employed borrowers, standard lending policies often fail to reflect genuine borrowing capacity, particularly when businesses are growing rapidly. By combining alternative income assessment methods, strategic lender selection, proactive valuation management and close collaboration with accountants, Mortar Finance helped Mitch unlock the true value of his property and business.

Instead of facing the costs and uncertainties of relocating, Mitch and his family can now enjoy a significantly improved home that better supports their lifestyle and adds long-term value to their property.

For homeowners considering renovations, extensions or major lifestyle upgrades, expert mortgage advice can often reveal opportunities that traditional lending approaches simply overlook. Mortar Finance’s personalised approach ensured Mitch achieved a timely, flexible and cost-effective funding solution that aligned perfectly with both his family’s future plans and the ongoing success of his business.

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