If you own a home you might not need a deposit to buy your investment property. You may be able to use your home equity (the difference between its value and what you owe) as security.
Why use home equity to buy my investment property?
No need to save a deposit
If you’ve paid off some of your loan, or the value of your property has gone up, you could have a fair bit of home equity. Rather than put yourself under the added financial burden of saving for another deposit, you can make use of this money that’s ‘sitting in your home’.
Save on Lender’s Mortgage Insurance (LMI)
Lenders will usually charge LMI if your deposit is less than 20% of the property value. As an investor you can access up to 80% of your home equity. This may cover part, or all, of that deposit amount. So you’ll pay less or no insurance, saving you thousands.