As many of you may already know, you might already have your next deposit hiding inside your own home.
It’s called equity, and it’s one of the most common (and overlooked) ways Aussies fund their first investment property without saving an extra dollar.
Here’s the simple version:
Home value ? what you owe = your Equity.
Take Rachel and Ben. Bought for $550,000 eight years ago, now worth $850,000, loan down to $400,000. That’s $450,000 in equity. All built quietly while they got on with life.
Lenders won’t let you access all of it though. Usually you can borrow up to 80% of your home’s value, which gives you your “usable” equity.
For Rachel and Ben, that’s $280,000. Enough to fund a deposit and costs on a new investment property, and importantly, no savings touched.
There are a few ways to release it:
- a loan top-up
- a separate loan split (great for keeping investment debt cleanly separate at tax time)
- or refinancing altogether.
Pair that equity with a brand new investment property, and you get strong depreciation benefits, higher rental appeal, and lower maintenance costs early on.
The result? Rachel and Ben now control $1.5M in property, using nothing but the growth they’d already earned.
If you’ve owned your home a few years, you could be closer to your next investment than you think. The first step is simply finding out what your equity actually is.
This is general information only and not financial or credit advice.
YPP. Build your tomorrow. Today.