Using Equity to Buy Again: The Smart Way to Expand Your Portfolio
Christian Stevens, Mortgage Broker
Published January 31, 2025, 2:10 p.m ET
Once you’ve built up equity in your home or investment property, you may not need to save a full deposit to buy your next property. Instead, you can use that equity to fund your next purchase — helping you grow your portfolio faster and more efficiently.
Here’s how it works and what to consider before using equity to buy again.
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🔑 Key Facts
- Using equity means borrowing against the increased value of your property to fund your next purchase.
- It allows you to buy another property without saving a full deposit.
- You still need to service the total loan amount — but you may avoid paying Lenders Mortgage Insurance (LMI).
- Flint helps you calculate usable equity, choose the right lender, and structure your portfolio growth with clarity and confidence.
What Does It Mean to Use Equity to Buy Property?
Equity is the difference between your property’s current market value and the amount you still owe on your loan. Once you have enough usable equity, you can access it to:
- Fund a deposit on your next property
- Cover purchase costs like stamp duty and legal fees
- Avoid lenders mortgage insurance (LMI)
Most lenders will let you borrow up to 80% of your property’s value — so your usable equity is the portion between what you owe and that 80% threshold.
Example: How Much Equity Can You Use?
- Current property value: $800,000
- Existing loan: $500,000
- 80% of value: $640,000
- Usable equity: $140,000 (i.e. $640,000 – $500,000)
This $140,000 could be used as a deposit and upfront costs for your next purchase, depending on lender policy.
Advantages of Using Equity to Buy Again
- Faster portfolio growth: Avoid waiting years to save another deposit.
- No need to sell: You keep your current home or investment and continue benefiting from its capital growth.
- Avoid or reduce LMI: With enough equity, you can borrow up to 80% and skip insurance costs.
- More leverage: You’re using existing assets to acquire more — building wealth through scale.
Things to Watch Out For
- You’re increasing your debt: Be sure your cash flow can support the new loan.
- Lenders will assess both loans: Your servicing ability needs to cover both properties.
- You may need a valuation: A formal valuation confirms your property’s value before releasing equity.
- Loan structuring matters: Keeping the new loan separate and interest-only (for investors) may help with tax efficiency.
Who Should Consider Using Equity to Buy Again?
- Existing homeowners or investors with rising property values
- People with strong incomes and stable cash flow
- Long-term investors seeking growth through leverage
- Anyone planning to build a property portfolio step-by-step
📞 Ready to Use Equity to Invest Smarter?
At Flint, we help investors:
- Calculate exactly how much usable equity is available
- Compare lenders offering flexible equity access
- Structure new loans for long-term portfolio growth
Talk to Flint today and let’s turn your property’s success into your next great opportunity.
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