Understanding how much equity you have in your property is one of the most important steps in building long-term wealth through real estate. Equity plays a major role in how quickly you can grow your portfolio, access better opportunities, and move from owning one property to multiple. Yet many investors still ask the same question: How much equity do I actually have, and how can I use it?
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A Property Investors Guide to Equity
What is Equity?
Equity is the difference between your property’s current market value and what you still owe on the loan.
To put it simply:
Equity = current market value - outstanding loan amount.
For example:
If your property is worth $700,000 and your remaining loan balance is $450,000, then your total equity is $250,000. However, not all of this is usable equity.
Most lenders will allow you to access equity up to 80% of the property’s value without paying Lenders Mortgage Insurance (LMI). This usable equity is what investors leverage to fund future purchases and scale up their investment property portfolio.
Here’s a simple breakdown:
This equity can then be used as a deposit, and to cover costs for your next investment property, allowing you to buy again without saving years for another deposit.
Equity is what allows property investors to scale up and build multi property portfolios.
Instead of relying solely on savings, successful property investors use equity to:
Without understanding equity, many investors stall after their first investment property purchase, even though their portfolio may already hold untapped potential.
Some property investors assume equity automatically means that borrowing more is always a good idea. That’s not necessarily the case.
Common mistakes include:
Equity should be used strategically, with long-term growth and serviceability in mind.
Knowing how much equity you have available and how much you can use is only the first step. The real value comes from structuring loans correctly, choosing the right investment locations, and ensuring your borrowing capacity supports future purchases.
If you want to understand how to leverage equity to build and grow your investment property portfolio, book a FREE call with Search Property. We’ll discuss your goals and position, and help you build a clear plan to move forward with confidence.
Disclaimer: Search Property Pty Ltd (SP) does not provide financial or investment advice and does not hold a financial services license as defined in the Corporations Act 2001 (Cth). Any advice given by SP is general in nature and does not take into account your personal circumstances or objectives, financial situation or needs.
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