Equity is the difference between your property’s current market value and the amount you owe on your mortgage. As your property grows in value and your loan balance falls, usable equity builds — and this equity can be accessed to fund your next investment property purchase without needing a new cash deposit.
How Much Equity Can I Access?
Most Australian lenders will allow you to borrow up to 80% of your property’s current market value (without paying lenders mortgage insurance), minus your existing loan balance. For example: if your property is worth $900,000 and your loan balance is $500,000, your total equity is $400,000. Usable equity at 80% LVR is (80% of $900,000) minus $500,000 = $720,000 minus $500,000 = $220,000. This $220,000 can be used as a deposit and costs for a new investment purchase.
What Is an Equity Release or Top-Up?
An equity release (also called a loan top-up or equity access loan) is where your lender increases your existing loan by the amount of usable equity, giving you cash or a line of credit you can deploy as a deposit on a new property. Alternatively, you can use the equity as cross-collateral security against a new loan for the investment property.
What Are the Steps to Access Equity for an Investment Property?
- Get a current market valuation of your existing property — either a formal bank valuation or a real estate agent appraisal.
- Calculate your usable equity: (current value x 0.80) minus current loan balance.
- Contact your current lender or a mortgage broker to apply for an equity release or loan top-up.
- Use the released equity as a deposit (typically 20% plus costs) on your next investment property.
- Use GeeVee to identify the highest-scoring suburb for your next purchase based on your portfolio objectives.
What Are the Risks of Using Equity to Buy Another Property?
Using equity increases your total debt exposure and your mortgage repayments. If both properties fall in value simultaneously (for example during a rate-rising cycle), your LVR can increase across the whole portfolio, reducing your financial buffer. Maintaining a cash buffer of 3 to 6 months of combined holding costs is essential when using equity to build a portfolio.
Frequently Asked Questions
- Do I need a new deposit to use equity?
- No — the equity itself acts as your deposit. Your lender either releases the equity as cash (which you use as a deposit) or accepts your existing property as cross-collateral security for the new loan.
- How long does it take to access equity?
- A loan top-up or equity access application typically takes 2 to 4 weeks, similar to a standard loan application. Having your financials ready (tax returns, payslips, existing loan statements) speeds up the process.
- Does GeeVee recommend specific properties to buy with my equity?
- GeeVee identifies the highest-scoring suburbs for your next purchase based on yield, growth trajectory, vacancy rate and infrastructure pipeline. Collings property advisors can then help you identify specific properties within those suburbs, including off-market opportunities.
Whether you’re buying your first investment property, building a portfolio, or exploring SMSF property investment, the Collings Property Platform gives you access to off-market opportunities, portfolio tracking, investment tools, and property insights powered by GeeVee AI. Join free today and start building your property future. collings.com.au/portal
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