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Stage 5 of 7
Using equity to buy a second property
Property Investor
Stage 5 / 7 · Equity

Using equity to buy a second property

Using your home equity as the deposit on an investment property. The valuation strategy, the LVR ceiling, and the cross-collateralisation trap to avoid.

11 min readBy James MitchellStage 5 of 7
Equity is not cash. It’s borrowing capacity, and it’s tax-deductible only if structured cleanly.

How an equity release actually works

Increase your owner-occupier loan up to 80% of new valuation, draw the cash, deploy it as deposit on the investment property, kept in a separate split. The split-loan structure preserves deductibility.

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WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees, or other loan amounts might result in a different comparison rate. Comparison rates are based on a secured loan of $30,000 over 5 years for vehicle finance and $50,000 over 5 years for equipment finance, as required under the National Credit Code.