Use the Equity in Your Home to Buy Your First Investment Property
Find out how much equity you can access and whether you’re ready to buy your next property.
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How We Work – Our 3-Step Process
1
Equity Review
We calculate how much usable equity is available.
2
Investment Strategy
We assess borrowing capacity and investment options.
3
Buy With Confidence
We structure the loan and manage the process from application through to settlement.
What Is Equity?
Equity is the difference between your property’s current market value and the remaining balance on your loan.
For example:
If your property is worth $900,000
And your loan balance is $500,000
Your total equity is $400,000
However, lenders do not allow you to access all of that equity.
Most banks will lend up to 80 percent of the property’s value without Lenders Mortgage Insurance. The portion between your current loan and 80 percent of the value is typically referred to as usable equity.
Understanding this difference is critical before making any investment decisions.
How Usable Equity Works
Using the example above:
Property value: $900,000
80 percent of value: $720,000
Existing loan: $500,000
Potential usable equity: $220,000
That $220,000 could potentially be used toward:
- Deposit for a new investment property
- Stamp duty and purchase costs
- Strengthening borrowing capacity
The key is structuring this correctly. The way equity is released can impact tax effectiveness, flexibility and future borrowing capacity.
Why Structure Matters
Using equity is not just about accessing funds. It is about structuring lending in a way that supports long term strategy.
Common mistakes we see include:
- Cross-collateralising properties unnecessarily
- Using the wrong lender for the equity release
- Not planning for future purchases
- Overextending borrowing capacity
- Failing to separate deductible and non-deductible debt
The right structure from day one can prevent costly restructuring later.
Is Using Equity Right for You?
Using equity may be appropriate if:
- You have experienced strong property growth
- Your income supports additional borrowing
- You have a long term investment mindset
- You understand property cycles and risk
It may not be suitable if cash flow is tight or if your future plans require flexibility.
Every investor’s position is different. That is why tailored advice matters.
How Shoreline Lending Helps
We assist investors by:
- Assessing current property values realistically
- Calculating usable equity
- Reviewing borrowing capacity across multiple lenders
- Structuring loans to suit long term investment goals
- Avoiding unnecessary cross-collateralisation
- Working alongside accountants where required
Our role is to ensure your lending structure supports both your current purchase and your future plans.
Frequently Asked Questions About Using Equity To Invest
Frequently Asked Questions About Using Equity To InvestStill have questions? Here are some of the most common questions we hear from homeowners looking to purchase their first investment property.
Can I buy an investment property without a cash deposit?
In many cases, yes. If you have enough equity in your current home, it may be possible to use that equity to cover the deposit and purchase costs, reducing or even eliminating the need for cash savings. Every lender has different requirements, so we’ll help determine what’s possible based on your situation.
How much equity do I need to buy an investment property?
The amount of equity required depends on the value of your home, your existing loan balance, the property you’re looking to buy and your borrowing capacity. As a general guide, most lenders allow borrowing up to 80% of your property’s value without paying Lenders Mortgage Insurance (LMI).
How do I find out how much equity I have available?
The first step is determining the current value of your property and comparing it to your existing loan balance. We can arrange property estimates and walk you through how much usable equity may be available.
Do I need to refinance my current home loan?
Not always. Some clients refinance to access equity or secure a better interest rate, while others may be able to keep their existing home loan and use a separate lending structure. We’ll compare the available options and recommend the most suitable approach.
Will using equity increase my repayments?
Potentially, yes. Accessing equity generally involves increasing your overall lending, which may increase repayments. We’ll provide a clear breakdown of the costs and help ensure the strategy aligns with your financial goals and budget.
Can I use equity to cover stamp duty and purchase costs?
In many cases, yes. Available equity can often be used to fund costs such as stamp duty, legal fees and other expenses associated with purchasing an investment property, subject to lender requirements.
How much can I borrow for an investment property?
Borrowing capacity depends on factors such as your income, existing debts, living expenses and the lender’s servicing policy. We can calculate your borrowing capacity and compare multiple lenders to help maximise your options.
Is there any obligation if I book an Equity Review?
No. The initial consultation is obligation-free. We’ll discuss your goals, assess your equity position and explain the available options so you can decide whether investing is the right next step for you.
Can I buy my first investment property through a trust or SMSF?
Potentially. Depending on your circumstances and long-term goals, investing through a trust or SMSF may be an option. We can work alongside your accountant and financial adviser to help determine the most appropriate structure.
How long does it take to access equity and purchase an investment property?
Timeframes vary depending on the lender and complexity of the application. In many cases, equity can be accessed and finance approved within a few weeks, allowing you to start searching for the right investment property sooner.
Book a free Investment Strategy Session and we'll help you understand how much equity may be available and whether you're ready to purchase your first investment property.
Ready to Explore Your Equity Position?
If you are considering purchasing your first or next investment property, understanding your usable equity is the first step.
We can provide clarity around:
- How much equity may be available
- What your borrowing capacity looks like
- How to structure lending properly
- Whether now is the right time to proceed
