Building wealth through property investment is a smart strategy, but many Australians don’t realise they’re already sitting on one of their greatest financial tools—home equity. If you own property, you may be able to leverage the equity in your home to accelerate your financial future by boosting your superannuation and purchasing investment properties.
In this guide, we’ll walk you through how to:
✅ Understand and calculate your home equity
✅ Use equity to strengthen your superannuation for retirement
✅ Secure investment properties without excessive out-of-pocket costs
✅ Manage risks and maximise financial benefits
Let’s dive in.
What is Home Equity and How Can You Access It?
Understanding Home Equity
Equity is the difference between your property’s current market
value and the remaining balance of your home loan.
For example, if your home is worth $800,000 and you still owe $300,000, your total equity is $500,000. However, not all of this equity is readily available to use—banks typically allow you to borrow up to 80% of your property’s value, minus your loan balance.
Example of Accessible Equity:
📌 80% of $800,000 = $640,000
📌 Available Equity = $640,000 - $300,000 = $340,000
This $340,000 can be used for investments, including purchasing an investment property or growing your superannuation.
Using Equity to Boost Your Superannuation
Your superannuation is one of your most important assets for retirement, and smart investors can use their home equity to enhance it.
Option 1: Contributing Equity-Funded Funds into Super
By releasing equity from your home, you can make voluntary contributions to your super, taking advantage of tax benefits.
✧ Concessional Contributions (Tax-Deductible) – You can contribute up to $27,500 per year and claim a tax deduction.
✧ Non-Concessional Contributions (Post-Tax Money) – You can contribute up to
$110,000 per year (or $330,000 in a three-year bring-forward rule).
Example: If you use $100,000 of equity to contribute to your super, you could benefit from
compounding investment growth within a low-tax environment (super funds generally tax earnings at only 15%).
Option 2: Buying Property Within an SMSF
If you have a Self-Managed Super Fund (SMSF), you may be able to use your equity to help fund an investment property purchase within your super.
✧ SMSF Lending – While your SMSF can borrow to buy property, banks typically require a larger deposit (e.g., 30–40%).
✧ Long-Term Growth – Investment properties inside super grow tax-efficiently, with
capital gains tax as low as 10% if held for over a year.
Example: An investor uses $200,000 of released equity to help fund a property purchase inside their SMSF. Over time, rental income and capital growth contribute to their retirement wealth.
Managing Risk When Using Equity
While leveraging equity is a powerful strategy, it’s essential to manage risk effectively.
✧Avoid Overleveraging
Only borrow what you can comfortably afford to repay. Consider interest rate rises and unexpected expenses when assessing your borrowing capacity.
✧Maintain a Financial Buffer
Keep an emergency fund or redraw facility available to cover unexpected costs.
✧Diversify Investments
Avoid putting all your eggs in one basket—consider a mix of superannuation, property, and other assets.
✧Seek Professional Advice
A financial planner or mortgage broker can help ensure you’re structuring your loans and investments correctly.
Using Equity to Buy an Investment Property
One of the most powerful ways to build wealth is using home equity to buy additional properties—without needing to save a large deposit.
Step 1: Access Your Equity
✧ Contact your lender to assess how much equity you can access.
✧ Consider refinancing if your current lender doesn’t offer competitive terms.
✧ Request a home valuation (banks use this to determine available equity).
Step 2: Use Equity as a Deposit
Instead of using cash, you can use equity as your deposit for an investment property.
Example:
✧ You find an investment property worth $600,000.
✧ Lenders require a 20% deposit ($120,000).
✧ Instead of saving cash, you release $120,000 in equity to fund the deposit.
✧ The remaining 80% ($480,000) is covered by a standard investment loan.
This strategy allows you to expand your portfolio without dipping into savings.
Step 3: Choose the Right Investment Property
To ensure your investment performs well:
✔ Look for
high-growth suburbs with strong rental demand.
✔ Ensure
positive cash flow (rental income covers mortgage repayments).
✔ Consider
tax benefits (negative gearing, depreciation).
Is This Strategy Right for You?
Using home equity to boost your super and invest in property can be a game-changer, but it’s not a one-size-fits-all approach.
It’s ideal for:
✅ Homeowners with significant equity in their property
✅ Investors looking to grow wealth tax-efficiently
✅ Those with a long-term retirement strategy in mind
If you’re unsure whether this strategy is right for you, speaking with a property investment specialist can help you make an informed decision.
Take the Next Step
Would you like to explore how your home equity can fund your future wealth? Our team at Living Property specialises in helping homeowners and investors strategically grow their portfolios.
📞 Book a free consultation today in the link below and let’s discuss how you can make your home equity work for you.
Your future wealth is closer than you think—start making the most of your home equity today!
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