Straight Answers
Property Investing
Practical lending knowledge for building a property portfolio. It covers how equity works, how lenders assess investors, and the structures that keep your options open.
What Is Equity?
Equity is the difference between what your property is worth and what you still owe on it. If your home is valued at $865,000 and your loan balance is $412,300, you have $452,700 in equity. You usually can't borrow against all of it, though. Most lenders will lend up to 80% of the property's value without lenders mortgage insurance (LMI), so your usable equity is that 80% figure minus your current loan, and you still need to pass the lender's serviceability test to access it.
6 min readUsing Equity as a Deposit
Yes, you can use the equity in your home as a deposit for an investment property, instead of saving cash. The lender releases part of your usable equity, usually up to 80% of your home's value, as a separate loan that covers the deposit and purchase costs such as stamp duty. A second loan, secured by the new property, covers the rest. You'll still need to show you can afford the combined repayments, and the way the loans are set up matters for flexibility and tax.
7 min readHow Investors Borrow Money
Investors borrow using an investment home loan, secured by the property, with a deposit funded by savings, equity in another property or both. Lenders assess your income, existing debts and part of the expected rent, then test whether you can afford repayments at a rate above the actual rate. Investment loans often carry slightly higher rates than owner-occupied loans, and investors commonly choose between interest-only and principal-and-interest repayments. A clean loan structure matters as much as the rate.
7 min readUnderstanding Serviceability
Serviceability is a lender's test of whether you can afford the repayments on a loan, both now and if rates rise. The lender takes your income, subtracts your living expenses and the repayments on all your debts, then checks there's money left over, using an assessment rate that is higher than the actual rate. Credit card limits, HECS-HELP debt, dependants and how your income is earned all affect the result. It's often the real limit on borrowing, more than deposit or equity.
7 min readInterest-Only Loans Explained
An interest-only loan lets you pay only the interest for a set period, usually one to five years, so repayments are lower and the loan balance doesn't go down. When the interest-only period ends, the loan switches to principal and interest over the remaining term, and repayments rise, sometimes sharply. Interest-only can help investors manage cash flow or prioritise paying down non-deductible home debt, but it usually costs more interest overall and often comes with a higher rate.
7 min readDebt Recycling Explained
Debt recycling is a strategy where you pay down your home loan, then borrow that same amount back through a separate loan split and invest it in income-producing assets such as shares or property. Your total debt stays about the same, but part of it changes from non-deductible home debt to investment debt, whose interest may be tax deductible. It can help some homeowners build wealth faster, but it adds investment risk and must be set up carefully with your accountant or financial adviser.
8 min readCross-Collateralisation Explained
Cross-collateralisation is when one loan is secured by more than one property, or several properties secure several loans together with the same lender. It's often used when buying an investment with equity from your home. It can seem simpler, but it gives the lender more control: when you sell, refinance or borrow again, the lender can revalue all properties and decide how much of the sale proceeds to release. A standalone structure, where each property secures its own loan, usually gives investors more flexibility.
7 min readPortfolio Lending Strategies
Growing a property portfolio is mostly about planning your lending, not just picking properties. A sound strategy keeps each property on a standalone loan, separates investment and personal debt, keeps cash buffers, and thinks ahead about which lenders to use and in what order, because serviceability usually becomes the limit before equity does. Regular reviews let you adjust as rates, values and your income change. The goal is a portfolio you can hold comfortably through good times and bad.
8 min readBook a discovery call
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