If you’ve built up equity in your current property, you might be wondering: Can I buy another property with equity release?
The answer is yes, and for many Australians, it’s one of the most strategic ways to grow a property portfolio without selling their existing home.
But before you jump in, it’s important to understand exactly how equity release works, what options are available, and the financial implications, especially when using it to fund another real estate purchase.
Let’s break it down.
What is Equity Release?
Equity release is the process of unlocking the usable equity tied up in your property without needing to sell it. Your equity is the difference between your home’s current market value and the amount still owing on your mortgage.
For example:
- Your home is valued at $900,000
- You owe $400,000 on your mortgage
- That means you have $500,000 in equity
Depending on the lender, you may be able to release up to 80% of that equity, or more if you’re working with private lenders.
This released equity can then be used for various purposes, from funding renovations to buying another property.
Can I Buy Another Property with Equity Release?
Yes, you can.
Homeowners and investors commonly use equity release to fund a second property’s deposit — or even the full purchase.
Here’s how it works:
- You take out a new loan secured against the equity in your existing property.
- That money is used as the deposit or full purchase amount for a new property.
- You now own two properties — your current one and your new investment — with separate (or sometimes bundled) loan structures.
This strategy is popular for:
- Upgraders wanting to keep their original property as an investment
- First-time investors tapping into existing home equity
- Business owners looking to buy commercial real estate
- Parents helping adult children enter the housing market
How to Release Equity from Home in Australia
There are a few ways to access the equity in your home:
Refinance Your Mortgage
The most common method is through banks. You increase the size of your home loan (refinance), and the additional funds are released to you as a lump sum.
But here’s the catch — you’ll often need to:
- Re-qualify based on income, expenses, and credit score
- Get a full valuation of your property
- Accept a new interest rate and loan term
Apply for an Equity Release Loan
If refinancing isn’t suitable — say, you don’t want to alter your original loan or your bank has said no – then a private equity release loan might be a better option.
These loans are:
- Secured against your home
- Structured independently of your main mortgage
- Often approved more quickly and with fewer hurdles
Private lenders like Pacific 8 specialise in equity release loans for borrowers with more complex needs, self-employed income, or time-sensitive plans.
Do Banks Offer Equity Release?
Yes, but only under specific conditions.
Most banks offer equity release via a line of credit or a refinanced loan top-up. But keep in mind:
- They typically cap lending at 80% LVR (Loan-to-Value Ratio)
- Strict credit and income checks apply
- Approval can take weeks
- They’re less flexible for investment or business use
If your financial situation doesn’t tick every box, you might find that traditional banks are unwilling to approve your equity release request.
That’s where non-bank lenders and private lending options can come in, offering more agility and tailored lending structures.
Do You Pay Interest on Equity Release Loans?
Yes, just like any loan, you do pay interest on equity release.
The interest structure depends on the lender and the product:
- Bank equity loans: often variable or fixed rates, capitalised over time
- Private equity release loans: usually short-term with interest-only repayments, or capitalised interest with a balloon payment at the end
At Pacific 8, we assess your situation and tailor the interest structure to suit your needs — whether you want to pay monthly, defer until the end, or structure it around a planned sale or refinance.
Does Releasing Equity Increase Mortgage Repayments?
It can, depending on how you structure the new loan.
Here are two possible outcomes:
If You Refinance Your Existing Mortgage:
- Your loan balance increases
- Your repayments go up (unless you switch to interest-only or extend the term)
- You’re locked into a new repayment schedule
If You Take Out a Separate Equity Release Loan:
- Your original mortgage stays untouched
- Your repayments on the equity loan are new and separate
- You may have flexible repayment options or a short-term balloon payment structure
Private lenders often allow more flexibility, such as interest capitalisation, which means no payments are required until the end of the term.
So, while releasing equity usually increases your debt, it doesn’t always mean you’ll face immediate or unaffordable repayments — especially if you have a strong exit plan.
Benefits of Using Equity Release to Buy Property
There’s a reason this strategy is so popular. Done well, it can:
- Allow you to enter the investment property market sooner
- Help you diversify income through rental returns
- Let you hold your current home and avoid selling
- Unlock access to capital without triggering CGT
- Save time by avoiding long-term savings plans
For investors and homeowners alike, buying another property with equity release can fast-track wealth creation and open new doors — quite literally.
Risks to Be Aware of With an Equity Release Loan to Purchase Another Property
As with any leveraged investment, there are downsides to consider:
- Increased debt load: You’ll owe more and take on more risk
- Market risk: If property values fall, your equity shrinks
- Cash flow impact: Even interest-only loans require an eventual repayment
- Exit pressure: If you plan to sell later, timing the market can be tricky
- Approval risks: Not all banks will accept the purpose of the loan
That’s why working with experienced lenders, who understand property strategy, is critical.
Is Equity Release the Right Move for You?
If you’re asking, “Can I buy another property with equity release?” — the answer is a confident yes.
But the smarter question is: Should I?
The decision depends on:
- Your equity position
- Your risk tolerance
- Your repayment strategy
- And your long-term financial goals
Buying property with equity release can be a savvy move — but only if you understand the full picture and structure your loan responsibly.
Speak to Pacific 8 About Equity Release Loans for Investment Property
At Pacific 8, we specialise in private equity release loans designed for homeowners and investors looking to expand their portfolios without refinancing their entire mortgage.
We offer:
- Loans from $300,000 to $25 million
- Loan terms from 3 months to 2 years
- Fast approvals in as little as 48 hours
- Custom lending options tailored to your equity position and goals
Whether you’re ready to invest or just want to explore what’s possible, our team is here to guide you through your options — clearly, confidentially, and without the red tape.
Contact us today to discuss how equity release can help you buy your next property — without selling your current one.