Using Equity From a First Investment Property — What to Consider Before Buying Again
Equity in your first investment property can become the deposit for your second. Whether that’s possible depends on your serviceability and how your loans are structured.
Some property owners may be able to access equity in an existing property to assist with another purchase, subject to lender approval and serviceability requirements.
How Equity Works in This Context
Equity is generally the difference between the property’s value and the outstanding loan balance. Many lenders allow borrowing up to around 80% of a property’s value without lenders mortgage insurance, although policies vary.
What Lenders Assess
When assessing an additional loan, lenders consider the borrower’s total financial position, including existing loans, liabilities, employment income and rental income from other properties.
Loan Structure Considerations
Some borrowers structure loans separately rather than cross-collateralising properties, as this may provide flexibility when refinancing or selling a property.
Serviceability Is the Key Factor
Serviceability is often the key factor in determining whether an additional property purchase is possible, as lenders assess the borrower’s ability to meet repayments across all loans.
You may wish to speak with a licensed mortgage broker to assess your personal circumstances.
This is general information only and does not constitute financial advice. Using equity to purchase investment property carries risk. Speak with a licensed mortgage broker and financial adviser before acting. All loans are subject to lender approval.
Sources: APRA Prudential Practice Guide APG 223; ATO, Rental Properties 2025; CoreLogic, Australian Property Investment Report 2025; RBA, Financial Stability Review 2024.
