You see it in your mind’s eye: it’s Christmas morning, and there it is – the shiny new SUV in the garage with the huge red bow on top. Or it’s a powerhouse of a 22-footer down at the marina. Or perhaps Mediterranean cruise tickets are snugly tucked in a stocking above the fireplace.

If you’re sitting on capital gains in your property because of rising housing values, these visions, once unobtainable, are suddenly not so far out of reach. Why not tap your equity and lift your level of luxury?

You may want to rethink that. The truth is, there’s not that much difference between finding yourself with more money in your house and finding yourself with a higher credit limit on your credit card.

This is not your money. While you’re living in it, the amount of equity in your house really only represents how much more debt you can take on. Can you really see yourself borrowing that much?

A quick look at Sorted’s mortgage calculator shows that borrowing against your equity is some of the cheapest money out there (as opposed to credit cards). Yet so much depends on how much you prolong the debt for. Stretching your repayments over a 20-year mortgage at say 6% drives up your true cost unbelievably.

Suddenly, the vision changes: the SUV’s cost balloons from $80,000 to $138,000, the $100,000 powerboat ends up costing a whopping $172,000, and that $20,000 cruise – long after you’ve returned to port – will still be $34,000 of debt.

Don’t get me wrong – finding that your house is worth tens of thousands more is great news for your net worth and really moves your financial position forward. To truly tap your equity you could always sell up, buy a sturdy house outright in the provinces and enjoy life.

But until you do, that value is something you’ll have to live with.

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