The honest answer is that you may not need to save a cash deposit at all. If you own a home, most of the deposit for your first investment property may already exist, in your equity.
By the Chase Wealth Australia advisory team · 13 July 2026
Work out your usable equity →
Most people who ask how to invest in property assume the first step is saving a deposit for years. If you already own a home, that may not be true. Every repayment you have made and every dollar the market has added to your home’s value has been quietly building equity, and a lender will let you borrow against a portion of it. For a lot of homeowners, the deposit for a first investment property already exists; it is just sitting in the house rather than in a savings account.
The mechanism in one line: usable equity can do the same job a cash deposit does, so you can buy without saving fresh cash. There is an honest catch that comes with it, though, because having equity and being able to borrow against it are two different things. This guide covers both, the door and the gate, and every figure below is shown and dated.
Start with the honest answer. If you own a home, most of the deposit for your first investment property may already be there in equity, and you can borrow against it instead of saving from scratch. Equity is your home’s current market value minus what you still owe on it. Usable equity is the narrower figure that actually matters: the part a lender will release, which is roughly 80 per cent of the value, minus your current loan balance.
Put real numbers on it. On an $800,000 home with a $500,000 loan, 80 per cent of the value is $640,000, and subtracting the loan leaves $140,000 of usable equity. That released money does the same job a cash deposit would, which is why a homeowner can often start investing without saving a fresh dollar. The formula is the whole idea in one line.
The word doing the work in that figure is usable. Your total equity might read higher, but the bank cares about the gap between 80 per cent of value and your loan, not the headline number on a statement. That distinction is the difference between “you have a lot of equity” and “here is what you can actually put to work.”
Saving 10 or 20 per cent in cash works, but it is the slow road, and in a rising market it can quietly go backwards. While you save, prices can move faster than your balance, so the deposit you are chasing keeps getting larger. That is the cost of waiting, and it is the argument for using capital you already hold rather than building new capital from income over years.
There is a second point that retired the old “wait for cheaper money” plan. The cash rate round-tripped through the cycle and sat at 4.35 per cent by mid-2026 after three rises that year, so anyone who waited through 2025 for rates to fall got a year of price growth and ended up at the same rate anyway (RBA, July 2026). Equity you have already built, by contrast, is available in weeks rather than years, which is the practical difference the two paths below describe.
None of this makes the debt disappear, and the later sections deal with that squarely. The point here is narrower: if the capital already exists, saving it a second time is the expensive way to reach the same starting line. Exactly how much of a deposit a purchase needs is set out in our guide to how much deposit you actually need.
Work it out with the same formula, using your own two numbers: your home’s current value and your current loan balance. Value multiplied by 0.80, minus the loan, gives your usable equity. On a home worth $700,000 with a $350,000 loan, that is $560,000 minus $350,000, or $210,000 to put to work; on the $800,000 home above it is $140,000. The figure scales with how much of your loan you have paid down and how far your suburb has moved.
One honest caveat sits under every estimate: your figure is only as good as the valuation behind it, and the same home can be valued differently by different lenders on the same day. That is why the number you calculate is a well-founded starting estimate, not the bank’s final word, and why a broker who can order more than one valuation can change the answer. To see your own figure against your two numbers, you can work out your usable equity in the calculator.
Enter your home’s value and loan balance to see your usable equity and the price range it could fund.
Open the Equity Unlock CalculatorThe mechanism is four steps, and none of them is exotic. First, establish your home’s value and your current loan balance. Second, calculate your usable equity with the formula above. Third, release it as a separate split loan against your home, kept standalone rather than tangled with the new purchase. Fourth, use that released money as the deposit and costs on an investment property that carries its own separate loan, with the rent covering a large share of the repayment.
Keeping the loans standalone matters more than it sounds. When one lender holds both properties as security for both loans, a structure called cross-collateralisation, it can block you from releasing equity later even when a property has grown, which is how investors get stuck at two or three properties. The fix is a standalone loan per property. The structuring, the tax treatment of the split and the lender choice are a deeper subject than one section allows, so for the full walkthrough read the complete guide to using equity to buy an investment property. If your equity purchase would be your first property overall, the full step-by-step of buying your first investment property walks the whole journey in order, and if you are repeating the move on an existing portfolio, how home equity works when you buy a second property covers that case.
Here is the catch that generic guides skip. Holding usable equity is necessary but not sufficient. Before releasing a dollar, a lender tests your income against the repayments, and not at today’s rate but at your rate plus APRA’s 3 percentage point serviceability buffer, which was reaffirmed in June 2026. At a competitive investor rate of around 6.2 to 6.5 per cent (as at July 2026), you are assessed as if you were paying more than 9 per cent. Plenty of homeowners hold the equity and still hear a no at the first bank they ask.
That is because serviceability, not the deposit, is where the decision is really made. It is also usually more solvable than a first no suggests: different lenders assess income differently, value the same property differently, and read self-employed income in their own ways, so structure and lender choice move the answer. The equity is the door; whether your income opens the gate is the question a strategy session exists to test.
Put $140,000 of usable equity to work and follow it through. Using a 10 to 20 per cent deposit plus about 5 per cent in buying costs, $140,000 covers the deposit and costs on an investment property in the $550,000 to $700,000 range. At the conservative end that is a 20 per cent deposit on a $550,000 property with costs cleared; at the stretch end it is a 10 per cent deposit on a $700,000 property with lenders mortgage insurance in the mix.
That band is not abstract. In the corridors we buy in, it reaches Perth entry suburbs such as Armadale at a median of about $680,000 (REIWA, 12 months to June 2026), and it stretches to Ipswich entry suburbs like Leichhardt and One Mile that sit under $700,000. Stamp duty is the largest cost and investors get no concession in either state: about $20,025 on a $600,000 Queensland purchase and $24,890 on a $650,000 Western Australian one (state revenue office scales, 2026). It is worth naming the two-speed backdrop as well, because the national “prices are falling” headline is largely a Sydney and Melbourne story; over the year to mid-2026 Perth and Brisbane were among the country’s strongest capital-city performers, which is part of what has quietly refilled homeowners’ equity in the first place.
Two rules keep an equity purchase on the right side of the line. The first is the 80 per cent cap. Releasing only to 80 per cent of value leaves a 20 per cent buffer, so a market dip of that order does not touch the bank’s position or force a sale. The second is the cash buffer: hold 6 to 12 months of expenses so a lost tenant, a rate rise or a vacant month never forces your hand at the wrong time.
Say the uncomfortable part out loud, because the honest version is also the more useful one. The debt is real. Release equity and buy, and your total position rises by the full price of the new property, not just the amount you drew. What makes that an investment rather than recklessness is that the new debt is matched by an income-producing asset, the rent carries a large share of the repayment, the 80 per cent cap keeps a value fall away from the bank’s position, and the buffer covers the gap. The bank saying yes is the start of the decision, not the end of it.
A strategy session tests your equity and income position against your goals and buffer, and shows you what it could buy in Brisbane or Perth. Bring your calculator result and we will pressure-test it against live lending conditions.
Book a strategy sessionThe figures in this guide are general information; a strategy session is where they become yours.
