The Easiest Way to Use Equity for Your Next Property

Your home equity can fund the deposit and costs for an investment property without needing years to save again.

If you own a property in Oxenford and have seen its value climb over the last few years, you may already hold enough equity to buy another property. Lenders will let you borrow against that equity to fund a deposit, stamp duty and settlement costs on an investment purchase. You keep your current home, and the rental income from the second property covers most or all of the new loan repayment. For buyers in Oxenford, where many purchased townhouses and houses before recent price growth, this approach turns unrealised value into a tangible asset without disrupting your existing living situation.

How Lenders Calculate Usable Equity

Usable equity is the difference between your property's current value and what you owe, minus the buffer lenders require.

Most lenders will lend up to 80 per cent of your property's value across all loans secured by that property, though some will go to 90 per cent if you pay Lenders Mortgage Insurance. If your Oxenford home is valued at the current median and you owe less than 60 per cent of that value, you will have equity available. The lender subtracts your current loan balance from 80 per cent of the valuation, then deducts costs such as LMI if applicable and any existing limits on your borrowing capacity. What remains is the amount you can access for a deposit on the next property. Borrowing capacity is shaped by your income, existing debts, living expenses and the serviceability buffer, which sits at three percentage points above the loan rate under current APRA settings.

Structuring the Loan Against Your Existing Property

You can release equity by refinancing your current home loan or by adding a separate split secured by the same property.

When you refinance to access equity, the lender replaces your existing loan with a larger one and the difference is paid to you or directly to the solicitor at settlement on the investment property. Alternatively, many lenders will add a second split to your existing loan without changing the original facility. This split can be interest-only to match the investment purpose and reduce repayments during the holding period. If your current loan is with a lender that offers access to investment loan options from banks and lenders across Australia, a split often settles faster because the valuation and credit file are already on hand. Either way, both loans remain secured by your Oxenford property until the investment property settles and is registered. At that point the lender typically takes a second mortgage over the investment property as additional security, and you can ask to reduce the loan to value ratio on your home.

Interest Only Repayments and Deductibility

Interest on borrowings used to acquire or hold a rental property is deductible when the property is rented or available for rent.

If you set the investment loan or split to interest only, your monthly repayment will be lower than a principal and interest loan. The interest is deductible against the rental income and, for properties acquired before the quarantine rules take effect on 1 July 2027, any net loss can offset your salary or wages. Consider a buyer who borrows against equity in their Oxenford townhouse to fund a deposit on a unit in Coomera. They set the new split to interest only over five years. The rental income covers most of the interest cost, and the shortfall reduces taxable income until the loss quarantine begins in mid-2027. After that date, losses on properties purchased after 7:30pm on 12 May 2026 can only offset other residential rental income or be carried forward, unless the dwelling is an eligible new build. If you already own investment property, any loss from the new property can still offset income from the existing one under the new rules.

Cross-Collateralisation and What It Means for Future Borrowing

Cross-collateralisation means one lender holds security over multiple properties, and any change to one loan requires consent across the portfolio.

When you borrow equity from your Oxenford home and the same lender also takes security over the investment property, both properties are linked. If you want to sell the investment property or refinance either loan in future, the lender must agree to release one security, and that process can involve revaluation, discharge fees and delays. Some buyers prefer to keep loans with separate lenders so each property can be dealt with independently. Others accept cross-collateralisation because it simplifies the initial approval and may deliver a rate discount across the portfolio. If you plan to acquire multiple properties over time, separating securities from the outset will give you more control when you sell or restructure. Your broker can model both approaches and show the difference in rate, cost and flexibility before you commit.

Borrowing Capacity Under Current Debt-to-Income Limits

From 1 February 2026, lenders must limit the share of new investor loans at a debt-to-income ratio of six times or more to 20 per cent of new flow.

This cap applies across the lender's investor portfolio, not to you individually, but it affects approval when your total debt sits above six times your gross income. If you earn a household income of ten thousand dollars per month and already owe four hundred thousand dollars on your Oxenford home, adding another loan that brings total debt above six hundred thousand dollars will require the lender to allocate one of its restricted slots to your application. Some lenders have exhausted their allocation early in each quarter, particularly during spring when investor demand rises. Lodging your application early in a quarter, or working with a broker who monitors each lender's position, will improve your chance of approval when your DTI is above the threshold. Borrowing capacity is also reduced by the three percentage point serviceability buffer, so even if you meet DTI requirements, the lender tests repayment at a rate three points higher than the actual product rate.

Changes to Negative Gearing from Mid-2027

From 1 July 2027, net rental losses on residential properties acquired after 7:30pm on 12 May 2026 can only offset other residential rental income or be carried forward.

If you purchase an investment property now using equity from your Oxenford home, and settlement occurs after 12 May 2026, any loss from that property will be quarantined from mid-2027 onward. You can still claim all deductible expenses, including interest, and you can offset the loss against income from other residential rental properties or against a future capital gain when you sell. Properties purchased before the 12 May 2026 cut-off retain access to full negative gearing until sold. Eligible new builds acquired after that date also retain full negative gearing. An eligible new build is one constructed on previously vacant land or where the build increases the number of dwellings on the site. Knock-down rebuilds that replace one dwelling with one dwelling do not qualify, and a new build loses eligibility if it is occupied for more than 12 months before being sold to you. If rental yield is already tight, the loss quarantine makes cash flow projection more important, and many investors now target properties where rent covers most of the interest cost from day one.

Capital Gains Tax Treatment for Properties Acquired Now

Gains accrued before 1 July 2027 on properties you already own will continue under the current 50 per cent discount rules.

Capital gains tax changes also begin on 1 July 2027, replacing the 50 per cent discount with cost base indexation and a minimum 30 per cent tax rate on real gains for affected assets. Gains you have built up until 1 July 2027 are protected under the existing discount, and only growth after that date is subject to the new calculation. Eligible new build residential properties can elect to keep the 50 per cent discount instead of indexation. For a property purchased now and held for ten years, the majority of the gain will have accrued under the current rules, reducing the impact of the new regime. The main residence exemption is unchanged, so your Oxenford home remains exempt from CGT as long as it stays your principal place of residence.

Rental Income Assessment and Vacancy Assumptions

Lenders will include rental income in your serviceability calculation, but they apply a haircut to account for vacancy and management costs.

Most lenders use 80 per cent of the rental income when they calculate how much you can borrow. If the investment property will rent for five hundred dollars per week, the lender adds four hundred dollars per week to your income for serviceability. This approach accounts for periods when the property is vacant, and for management fees if you use an agent. Some lenders accept a rental assessment from a licensed agent in the area where you are buying, while others use a database or postcode average. In Oxenford and nearby estates such as Maudsland and Willow Vale, rental demand has stayed solid because of proximity to the M1, Westfield Coomera and several private schools, but a lender will still apply the 80 per cent shading. If you already receive rent from another property, most lenders will include that income immediately. If the new property has not yet settled, they will add the projected rent once you provide a lease or a rental assessment, and they will confirm the lease is in place before final settlement.

Using Equity to Fund Stamp Duty and Settlement Costs Without Cash Savings

Stamp duty and settlement costs can be paid from the equity release, leaving your savings intact for offset or emergency funds.

When you borrow against your Oxenford home, you can include all upfront costs in the amount you draw. The lender will advance the funds to your solicitor at settlement, covering the deposit top-up, stamp duty, legal fees, building and pest inspection, and any lender fees. This approach keeps your cash available to sit in an offset account against your owner-occupied loan or to cover holding costs if the investment property takes time to lease. Stamp duty in Queensland is calculated on the purchase price and, for investment properties, does not attract any first home concession. Settlement costs typically add another few thousand dollars depending on the property location and loan structure. If your equity position is sufficient, you can borrow the full amount and start the investment journey without waiting to rebuild savings.

If you own property in Oxenford and want to understand how much equity you can access, call one of our team or book an appointment at a time that works for you. We will run the valuation, model your borrowing capacity, and show you which lenders are writing investor loans at your debt-to-income level right now.

Frequently Asked Questions