Using Equity to Buy an
Investment Property

How equity access works

Equity is the difference between your property's current market value and what you owe on it. If your home is worth $800,000 and you owe $400,000, you have $400,000 in equity. Lenders typically allow you to access up to 80 per cent of the property value, which means your usable equity is ($800,000 x 0.80) minus $400,000 = $240,000.

This equity can serve as the deposit and costs for an investment property purchase. You do not receive the money as cash — instead, the lender increases the borrowing against your existing property (usually via a line of credit or a separate split) and the funds are used toward the new purchase.

Risks to understand

Using equity increases your total debt and your exposure to the property market. If property values fall, you could find yourself owing more than your properties are worth. Your home is also directly at risk — if you cannot service the combined debt, you could lose your family home as well as the investment.

Read our guide on avoiding cross-collateralisation to understand how loan structure affects your risk. For the broader picture, see our complete investment property loans guide.

Frequently asked questions