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Can I use the equity in my current home as a deposit?

Yes, equity is a powerful tool that can set you on the road to building a profitable investment property portfolio.

You can use the equity in your home as an investment property deposit and if you have enough equity built up, you can borrow 80% of the property’s value without having to use your own cash.

How equity is calculated

Your accessible equity is the difference between your home’s current value and how much you still owe on your home loan.

If you’ve lived in your home for five years or more, you’ve probably accumulated quite a bit of accessible equity.

But lenders will only lend up to 80% of your home’s current value minus your current mortgage. This is known as your useable equity, which is quite a bit less than your accessible equity.

But it can still be a significant amount for an investment property deposit or any other use you may have for it, such as renovating your home, investing in shares or managed funds or improving your lifestyle with a holiday or new car.

Tips when buying an investment property

  • All investments carry some level of risk, so to reduce your exposure when accessing your equity;
  • You could keep some of your equity for emergencies, instead of using it all to invest in property.
  • Consider repaying your home loan as quickly as you can.
  • Think about learning more about property investing so you can make educated choices.
  • It's always important to get professional financial advice to fully understand your options.

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Our home loans are subject to credit criteria and eligibility requirements. Home loan interest rates are for new customers only and can change. Our comparison rates are based on a $150,000 loan amount over a 25 year term. They factor in fees associated with applying for the loan; ongoing fees and fees associated with leaving the loan. Our fixed loans roll to a variable principal and interest rate at the end of the fixed term. If the interest only period is not specified, the comparison rate is calculated on a one year period.

WARNING: The comparison rates are true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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