The short answer is that your home’s equity becomes the deposit. You borrow against the value your home has built, and that released money does the job a cash deposit would on the second property.
By the Chase Wealth Australia advisory team · 13 July 2026
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Here is the short version: when you buy a second property, your home equity works as the deposit. Instead of saving fresh cash, you borrow against the value your home has already built, and that released money does the job a cash deposit would on the new purchase. The second property takes its own loan, and its rent helps carry the repayments.
The number that decides how far it stretches is your usable equity, not the headline equity figure, and the formula is short: your home’s value multiplied by 80 per cent, minus your current loan. This is the plain-English primer on how that works, with every figure shown and dated. If you want the wider question of how to invest in property using your equity, start there; this guide zooms in on the second-property mechanism itself.
Home equity is the part of your property you own outright: its current market value minus what you still owe on it. A $1,000,000 home with a $600,000 loan holds $400,000 of equity. When you buy a second property, that equity can act as your deposit, because instead of saving new cash you borrow against value your home has already built, and the released money funds the deposit and costs on the next purchase.
The figure a lender will actually let you use is narrower than the headline equity. Banks typically lend up to 80 per cent of a property’s value without lenders mortgage insurance, so your usable equity is 80 per cent of the value minus your current loan. On an $800,000 home with a $500,000 loan, that is $640,000 minus $500,000, or $140,000 to put toward the second property.
This is the distinction that trips people up, so it is worth slowing down on. Total equity is value minus loan. Usable equity is what the bank will release, and it is almost always the smaller number, because usable equity is driven by your loan balance against the 80 per cent line, not by the headline equity figure.
Take a $900,000 home with a $500,000 loan. The total equity is $400,000. But 80 per cent of $900,000 is $720,000, and once you subtract the $500,000 loan, the usable equity is $220,000. “You have $400,000 in equity” and “you can access $220,000” are different sentences, and the second one is what your deposit is actually built from. To put your own figures in and see the number that matters, see your usable equity in the calculator.
Underneath the formula, the mechanism is a short sequence. It is the same whether it is your second property or your fifth, and it runs like this:
That is the shape of it. Keeping the second property’s loan standalone rather than tangled with your home is the structural detail experienced investors care most about, and there is more to weigh on loan structure, tax treatment and risk than belongs in a primer. For the full walkthrough, read the complete equity guide.
Put the numbers together on the canonical example. Your home is worth $800,000 and you owe $500,000. Eighty per cent of the value is $640,000. Subtract the $500,000 loan and you have $140,000 of usable equity. That $140,000 covers the deposit and buying costs on a second property in roughly the $550,000 to $700,000 range: at the conservative end, a 20 per cent deposit on a $550,000 property with costs cleared; at the stretch end, a 10 per cent deposit on a $700,000 property with lenders mortgage insurance in the mix. Either way it is a real purchase in the Queensland and Western Australia corridors we buy in.
Your home loan increases by the amount you release, the second property carries its own separate loan, and the rent helps carry the combined repayments. The headline number is the easy part. What it costs to hold, and whether the bank will release it, are the parts worth getting right.
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 deposit is only part of the cash the second property needs. A common rule is a 20 per cent deposit plus roughly 5 to 7 per cent in buying costs, so budget around 25 per cent of the purchase price all in. On a $600,000 second property that is about $120,000 for the deposit and roughly $40,000 in costs. Stamp duty is the largest of those costs, and investors pay the full rate with no concession: about $20,025 on a $600,000 Queensland purchase and $24,890 on a $650,000 Western Australian one (state revenue office scales, 2026). The full deposit picture, including buying on a 10 per cent deposit with lenders mortgage insurance, is in the guide to how much deposit you need.
Before any of it, hold a cash buffer. The discipline experienced investors keep is 6 to 12 months of expenses set aside, so a vacant month, a rate rise or a lost job never forces a sale. Releasing equity increases the debt against your home, and the buffer is what keeps that debt comfortable rather than fragile.
Having usable equity is necessary but not sufficient. Before releasing a dollar, a lender tests your income against the new repayments at your actual rate plus a 3 percentage point serviceability buffer (APRA, reaffirmed June 2026). At a competitive investor rate near 6 per cent, that means you are assessed as if you were paying around 9 per cent. Plenty of homeowners hold the equity and still hear a no at the first bank they ask, because serviceability, not the deposit, is where the decision is really made.
The money side is usually solvable, because different lenders assess income differently, value the same home differently, and loan structure moves the answer. Much of this applies whether it is your second property or your first. If you are still on the first, buying your first investment property walks through the full process in order.
A strategy session tests your equity and income position against your goals and buffer, and shows you what a second property could look like 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.
