The concept of using equity to purchase an investment property can enable clients to launch their plans to build a successful property portfolio – whether it’s to buy one additional property or purchase several more.

We have taken a number of clients on this journey and now they all have thriving investment property portfolios which will lead to financial freedom in the long term.

Darren and Ashley were great clients who had the right idea – pay down their mortgage as fast as possible. In doing so, they had equity in their home to assist with purchasing their first investment property. They realised they wanted to build a portfolio, which would assist with their retirement in twenty years’ time and also build wealth along the way.

The Example of Using Equity

  • Their home is worth $850,000
  • Their current home loan balance is $350,000

As investors, they accessed up to 80% of the equity in their home, less their existing loan, to assist with purchasing an investment property. Therefore 80% of $850,000 = $650,000

Total available equity = $650,000 – $350,000 = $300,000

They purchased an investment property for $400,000 and also needed to budget $20,000 for additional costs such as stamp duty, legal fees and disbursements. Their total costs are now $420,000.

Using the equity in their home, they funded the 20% deposit and costs which was $100,000 (i.e. 20% of $400,000 and $20,000 for costs).

They also had a separate loan for the 80% lend against the investment property, which was $320,000.

The rental income for this investment property serviced the 80% loan of $320,000 and the loan of $100,000.

The Outcome

As Darren and Ashley gained confidence, they repeated the process and have now purchased four investment properties – all funded from the equity in their own home. Importantly, they have also protected themselves from over leveraging their properties’ equity by continuing to pay down their primary mortgage.


If you would like to know more about using the available equity in your own home or in your investment property/ies to build an investment property portfolio, let us show you how this is achievable.