If you already own a property, you may be sitting on a powerful tool for building long-term wealth and not even realise it. As property values on the Gold Coast continue to climb, many homeowners have built significant equity in their homes without taking any extra action. That equity can be used to purchase another property, whether it’s an investment, a holiday home, or your next upgrade.
In this guide, we’ll explain how equity works, how to access it, and how to use it wisely to expand your property portfolio.
What is equity, and how does it work?
Equity is simply the difference between what your home is worth and what you still owe on your mortgage. If your property has increased in value over time or you’ve been paying down your loan steadily, your equity grows with it.
For example, if your home is currently valued at $900,000 and your outstanding loan is $500,000, you have $400,000 in equity.
However, that doesn’t mean you can automatically access the full amount. Lenders typically allow you to borrow up to 80% of your property’s value, which helps reduce their risk and protects you from over-leveraging. The amount you can actually use is called usable equity, and that’s what you can draw upon to fund another purchase.
How to calculate your usable equity
Calculating usable equity is relatively simple once you understand the formula.
- Start with your property’s current market value.
- Multiply that value by 0.8 (or 80%).
- Subtract your existing loan balance from that number.
Using the earlier example:
$900,000 × 0.8 = $720,000
$720,000 – $500,000 = $220,000 usable equity
That $220,000 could form the deposit for your next property, or even cover a larger portion, depending on the purchase price. In many cases, this means you can invest without selling your existing home.
It’s important to note that lenders will generally want a recent valuation to confirm your property’s market value. A small increase in value can make a big difference in how much equity you can access.
Ways to use equity to buy another property
Once you’ve determined your usable equity, there are a few ways you can put it to work. The right approach depends on your goals, financial situation, and long-term plans.
1. Buying an investment property
This is one of the most common strategies. Many homeowners use their equity as a deposit to buy an investment property, which can generate rental income and potential capital growth over time.
2. Upgrading to your next home
Equity can also be used to help you buy a new home before selling your current one. This approach is popular for families who want to move without the stress of bridging finance or temporary accommodation.
3. Diversifying your portfolio
Some investors use equity to purchase multiple properties in different markets or property types. For example, you might already own a house on the Gold Coast but want to add an apartment in Brisbane or a coastal holiday unit in Northern NSW.
4. Renovating or value-adding
Using equity to fund improvements can increase your property’s value further, creating a cycle of growth. This could include cosmetic upgrades, extensions, or energy-efficient additions that make your property more attractive to future buyers or tenants.
How to access your equity
There are a few main ways to access your home’s equity, and each works slightly differently depending on your lender and loan structure.
Refinancing your loan
This involves taking out a new loan with your current or a different lender based on your property’s updated value. Refinancing allows you to release some of your equity as cash or use it directly for another purchase.
Home equity loan or line of credit
A home equity loan lets you borrow a lump sum against your property’s equity, while a line of credit works more like a credit facility you can draw from as needed. Both options can provide flexibility if you’re planning staged investments or renovations.
Redraw facility
If you’ve been making extra repayments on your current mortgage, you may be able to access those additional funds through a redraw facility. It’s a simple option for smaller investments or deposits.
The best structure depends on your personal finances, loan type, and investment goals. Many investors work with their mortgage broker, accountant, and buyer’s agent together to ensure the strategy is sustainable and tax-efficient.
Things to consider before using equity
Leveraging equity can be a smart way to accelerate your property journey, but it’s not without its risks. Before you take the next step, it’s worth considering a few important points.
Firstly, releasing equity increases your total debt. While that can be a positive move if the new property appreciates in value or produces rental income, it’s still crucial to ensure your repayments are manageable even if interest rates rise.
Secondly, property values can fluctuate. Just because your home has grown in value doesn’t guarantee it will continue to do so indefinitely. Always plan for the long term, and base decisions on solid fundamentals rather than short-term market movements.
Finally, investment properties come with additional costs — maintenance, insurance, strata, and potential vacancy periods all impact your return.
This is where working with professionals becomes essential. COAST Buyer’s Agency helps clients analyse the Gold Coast market to find properties that align with their financial strategy and deliver sustainable growth. Our team looks beyond the numbers, identifying suburbs and property types that offer strong fundamentals and lifestyle appeal.
How COAST Buyer’s Agency helps investors use equity strategically
When it comes to using equity to build your portfolio, timing and strategy matter as much as numbers. At COAST, we collaborate closely with financial advisers, brokers, and accountants to ensure every purchase supports your long-term goals.
We start by understanding your broader picture, including how much usable equity you have, what level of risk you’re comfortable with, and what kind of property best suits your objectives. From there, we help you identify suburbs with consistent growth, desirable rental demand, and future development potential.
Because we work exclusively on the buyer’s side, our focus is on securing the right property at the right price. Whether you’re buying your first investment or expanding an established portfolio, we guide you through negotiation, due diligence, and settlement so the process feels seamless.
For many of our clients, partnering with a buyer’s agent means unlocking opportunities they didn’t know were possible. What starts as a conversation about equity often becomes the foundation for long-term wealth creation.
Build long-term wealth with the right support
Your existing home can be the key to building a stronger financial future. By understanding and leveraging your equity wisely, you can step into your next property with confidence and purpose.
If you’re ready to explore how to use your equity to invest on the Gold Coast, COAST Buyer’s Agency can help you plan your next move.
Book a free consultation to discuss what stage of the property buying journey you’re at and how to make your equity work for you.
