How to Use Equity to Grow Your Property Portfolio Faster
Equity is one of the most powerful tools in property investing. If you already own a home or an investment property, you may be able to use your equity to purchase your next property without saving a large deposit.
1. What is Equity?
Equity is the difference between your property’s value and what you owe on your mortgage. For example, if your home is worth $800,000 and you owe $500,000, you have $300,000 in equity.
2. How Much Equity Can You Use?
Lenders will typically let you borrow up to 80% of the property’s value, minus any existing loan. Using the example above:
80% of $800,000 = $640,000
Minus existing loan of $500,000
Usable equity = $140,000
3. Using Equity as a Deposit
Instead of saving a new cash deposit, your usable equity can be used to finance a second property. Many investors use this strategy to grow their portfolio faster.
4. Things to Consider Before Using Equity
✔ Ensure you have a solid repayment plan
✔ Keep a financial buffer for unexpected costs
✔ Work with a mortgage broker to structure your loans correctly
5. Getting Expert Guidance
Using equity wisely can fast-track your investment journey, but structuring your loans incorrectly can create financial stress. A buyer’s agent can help you find high-growth properties, while a mortgage broker ensures your finance strategy supports long-term portfolio growth.
If you’re ready to grow your portfolio but aren’t sure how to use equity effectively, getting professional advice can make all the difference.
Thanks for reading, see you in my next post.
Erin x
Erin May Watt
