Releasing equity from commercial property

Equity release turns the gap between what a commercial property is worth and what's owed against it into usable cash, without needing to sell the asset. It's commonly used to fund a new acquisition, cover working capital, clear a tax debt, or top up a project - structured either as a second mortgage behind an existing loan, or as a full refinance that releases the equity directly.

Two structures, two different economics

• Second mortgage - sits behind the existing first mortgage, leaving a well-priced facility untouched
• Refinance - replaces the existing loan entirely with one new facility
• A second mortgage is usually cheaper when the first mortgage is worth preserving
• A full refinance can work out cheaper overall once the existing facility isn't worth keeping

Which one actually applies

This comes down to the existing first mortgage, not preference. If it carries a strong rate or would attract meaningful break costs, a second mortgage releases the equity while leaving it exactly where it is. If the first mortgage isn't worth defending - a high rate, an expiring term, or a lender you want to exit anyway - a refinance into one facility is usually simpler and can cost less overall.

Don't start from the amount you want to release. Start from what the existing first mortgage is actually worth keeping.

What decides the amount available

Alphacon funds equity release from $100,000 to $10,000,000, assessed on the resulting loan-to-value position rather than income - up to 75% LVR on a refinance, or 70% combined LVR where Alphacon Second sits behind the existing first mortgage. The available amount is driven by the property's value and any existing debt against it, not a fixed multiple of income.

Handled deliberately, equity release is a precise way to fund the next move without disturbing a good position elsewhere. The two structures solve the same problem differently - the right one depends entirely on what you're releasing equity from, not just how much.