Using equity for your next investment: start with the structure

Begin with usable equity

Equity is the difference between a property value and the debt secured against it. The amount a lender may allow you to access depends on valuation, lending limits, serviceability and the proposed purpose.

Keep each purpose easy to identify

Separate loan splits can make it easier to track what borrowed funds were used for. Mixing private and investment spending in one account can create unnecessary complexity.

• Identify the purpose before funds are drawn
• Keep investment deposits and costs separate from personal spending
• Record transfers and settlement payments
• Ask a tax professional about deductibility rather than assuming

Cross-collateralisation changes your flexibility

Using more than one property as security may support a transaction, but it can also give one lender control over several assets. Understand the release and refinance implications before proceeding.

Serviceability still sets the ceiling

Having equity does not automatically mean you can borrow it. Rental income, existing repayments, household expenses and lender buffers all form part of the assessment.

Choose repayment features for the strategy

Interest-only periods, offset accounts and fixed or variable rates involve different costs and risks. The loan structure should support the investment plan and expected cash flow.