A lot of people assume they need a big cash deposit sitting in their savings account to buy an investment property. But if you already own a home, that may not be the case.
Instead of using cash, you could use something you already have: equity.
Let’s walk through how it works - and how you can use equity to get into your next property sooner, without needing to save from scratch.
Equity is the difference between what your home is worth and what you still owe on the mortgage.
So, if your property is worth $900,000 and your loan balance is $500,000, then you’ve got $400,000 in equity.
But that doesn’t mean you can access it all.
Most lenders will let you borrow up to 80% of your home’s value without triggering Lenders Mortgage Insurance (LMI). That’s the threshold many investors aim for to avoid extra costs.
Using the same example:
That $220,000 could be used as the deposit for an investment property — without dipping into your savings.
Let’s say you’re eyeing an investment property in Queensland for $800,000. You plan to use equity from your current home for the deposit.
Here’s how it could look:
With $220,000 in usable equity, you’d likely have enough to cover both the deposit and upfront costs — without using your cash savings.
Your lender may choose to cross-secure your home and the new investment property — meaning both properties act as security for the loan. This can increase borrowing power but also carries risks if one property drops in value or needs to be sold.
Also worth noting: interest rates on investment loans are generally higher than for owner-occupied loans — something to factor into your cash flow planning.
What are the benefits of using equity?
No need to dip into savings
Faster path to growing your portfolio
Let your existing assets do more heavy lifting
"Rather than saving another deposit from scratch, you're leveraging what you’ve already built."
Even if equity covers your deposit, it’s important to budget for:
Some of these can be capitalised or added to your loan, but it's best to have a full picture upfront.
Using equity can be a powerful tool — but it’s still borrowing. You’ll want to make sure the numbers stack up, the loan structure is right, and you’re comfortable with the risk profile of holding multiple properties (especially if they’re cross-secured).
Let’s run the numbers.
Daniel can help you understand how much equity you can use, what the repayments would look like, and whether this strategy aligns with your long-term goals.
Book a chat and let’s figure out what’s possible - without touching your savings.
This is general advice and does not take into account your personal circumstances.
