You make your mortgage payment on time. You take pride in your home, with scented candles and remembering to change the oven clock when daylight saving ends.

Good news: you’ve probably accrued some equity. That’s the difference, in dollars, between how much you owe (your home loan) and how much your home is worth. So, if you’ve paid down your loan to $250,000 and your home is worth $550,000, that’s $300,000 in money that’s yours – not the bank’s.

How can you access the equity in your house and put it to good use? Let’s find out.

1. Find out how much equity you have.

This is a pretty important step. First, you’ll need to have a property valuation done. A valuer will come to your home and look at things like the condition of your property, how big it is, where it’s located and how many kinds of cereal you have.

Then, find out the remaining balance of your home loan, grab your calculator and BODMAS it up. The difference between the two numbers is your available equity.

2. Know what you want to use it for.

Even though it can seem like free money, the equity in your home is the result of your hard work. Think carefully about how you might spend it to add value to your existing home, or improve your lifestyle in ways like:

  • Renovations or refurbishments on your existing home.
  • Investing outside of property, like in shares.
  • Putting down a deposit on an investment property.
  • Buying a new car, or taking the fam on a holiday.

3. Redraw from your loan.

If you’re ahead with repayments, you might be able to use redraw to dip into your equity. That means accessing the extra capital you’ve paid down, not the entire balance of your equity, so you’re limited to the value of those additional repayments. That may not be enough if you’re planning something big like a home renovation.

You could also consider a loan top up. This is as easy as getting in touch with your lender and asking to add a bit more onto the balance of your loan and using that money to further invest.

4. Refinance your home loan.

Refinancing your home loan to access equity can be great for two reasons:

1. You can tap into the funds you need.

2. It’s a chance to secure a better deal than your current home loan.

Yes, refinancing does take a bit more effort than a loan top up or asking a kind billionaire but it could mean savings with a lower rate, better loan features or just the pleasure of a great new lender.

5. Avoid putting yourself under financial stress.

You know when you were a kid and you had five dollars and you wanted to spend it so badly your whole body hurt? But your parents made you save it so you could “learn”?

Just because you have equity, doesn’t mean you have to use it. Your access to it will depend on your current income, financial history, living expenses and the amount owing. There may also be additional fees associated, and, of course, using your equity means your home loan balance will increase.