14/05/2026
How to Use Equity to Buy an Investment Property
By Home Loans Mart
In today’s Australian property market, many homeowners are sitting on a powerful opportunity — and they don’t even realise it.
It’s called equity.
With property values increasing across many parts of Australia, especially in Melbourne, homeowners may be able to use the equity in their current home to purchase an investment property — without needing years to save another full deposit.
Let’s break it down in simple terms.
What Is Equity?
Equity is the difference between what your property is worth and what you still owe on your mortgage.
For example:
Your home value: $900,000
Your current loan: $400,000
Your equity: $500,000
However, banks usually allow you to access up to 80% of your property value (without paying Lenders Mortgage Insurance).
In this case:
80% of $900,000 = $720,000
Existing loan = $400,000
Potential usable equity = $320,000
That usable equity could potentially become the deposit for your next investment property.
How Does It Work?
Here’s the simple process:
1️⃣ Property Valuation
Your lender assesses the current market value of your home.
2️⃣ Equity Release
You refinance or increase your existing loan to access available equity.
3️⃣ Use Equity as Deposit
The released funds can be used as a deposit for your investment property.
4️⃣ Investment Loan
You take a separate loan for the investment property purchase.
This strategy allows you to grow your property portfolio without selling your family home.
Why Many Australians Are Using Equity
With rising living costs and increasing rent prices across Australia, property investment has become a long-term wealth strategy for many families.
Using equity can help you:
✔ Enter the investment market sooner
✔ Build long-term wealth
✔ Potentially receive rental income
✔ Benefit from capital growth
✔ Access possible tax advantages (speak to your accountant)
Important Things to Consider
Using equity is powerful — but it must be done correctly.
Here are key factors lenders assess:
Your income and borrowing capacity
Existing debts and commitments
Living expenses
Credit history
Interest rate buffers
It’s not just about having equity — it’s about having the servicing capacity to manage both loans comfortably.
That’s where proper structuring becomes critical.
Is This Strategy Right for You?
Every client’s situation is different.
Sometimes it’s not a “no” — it’s just the wrong structure.
At Home Loans Mart, we look at the full picture:
Your goals
Your borrowing power
Your long-term strategy
Risk management
We help you structure it correctly from the beginning — whether you're a first-time investor or expanding your portfolio.
Let’s Review Your Equity Position
You might already be closer to your next investment than you think.
📞 0403-690000
📧 [email protected]
🌐 www.homeloansmart.com.au�
Home Loans Mart
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