Brisbane’s property market has experienced significant price growth, boosting the equity in your investment property. If you’ve been considering expanding your portfolio, now could be the perfect time to tap into your equity and invest in your next property.
With rising property values, many investors are using their increased equity as a deposit for a new investment—without needing to dip into savings. But how do you do it effectively while maximising your returns?
In this edition, we’ll explore how you can access your equity, finance your next investment, and make the most of Brisbane’s booming market.
- Understand Your Equity
Equity is the difference between your property’s market value and the remaining mortgage balance.
For example, if your investment is worth $800,000 and your remaining mortgage is $400,000, your total equity is $400,000.
- Determine Usable Equity
Lenders typically allow you to access 80% of your property’s value minus any existing mortgage.
Using the example above:
- 80% of $800,000 = $640,000
- Minus mortgage of $400,000 = $240,000 usable equity
You may be able to borrow more (up to 90%) with Lenders Mortgage Insurance (LMI), but this adds extra costs.
- Ways to Access Equity
Once you determine your usable equity, you can access it through:
- Home Equity Loan: A separate loan using your equity as security.
- Loan Top-Up: Increase your existing home loan amount.
- Refinancing: Replacing your existing mortgage with a larger one.
- Use Equity as a Deposit for Investment Property
Once your equity is unlocked, it can be used for:
- Deposit (typically 20%)
- Stamp duty & legal fees
- Renovation or other costs
Brisbane’s rising property prices present a golden opportunity to grow your investment portfolio. By leveraging your home equity wisely, you can secure your next property without needing a large cash deposit.
However, smart investing requires careful planning—understanding your borrowing capacity, market conditions, and investment strategy is key. Whether you’re looking to buy your next rental property or diversify your portfolio, now is the time to explore your options.
Need expert guidance? Speak to one of our qualified mortgage brokers to structure your loan effectively and make the most of Brisbane’s booming market.