Using Property Equity to Fund Your Business or Investments
If you own property, you may be sitting on an untapped funding source — your home equity. Whether you’re looking to expand your business, invest in new opportunities, or consolidate debts, leveraging property equity can be a powerful financial strategy when done wisely.
What Is Property Equity?
Property equity is the difference between your property's current market value and the balance remaining on your mortgage. For example, if your home is worth $800,000 and you owe $400,000, you have $400,000 in equity. Banks are often willing to lend a portion of that equity — sometimes up to 80% of your home’s value — depending on your income, credit history, and overall financial position.
Why Use Equity for Business or Investment Purposes?
Tapping into property equity is often cheaper than taking out an unsecured business loan or personal loan because it’s secured borrowing, meaning the interest rates are generally lower. It also allows you to access larger amounts of capital with more flexible repayment options.
Popular Ways to Use Your Property Equity
1. Revolving Credit Facility
A revolving credit mortgage works much like an overdraft, but it’s secured against your home. You have a credit limit (based on your equity), and you can draw and repay funds as needed. It’s flexible and great for managing fluctuating cash flow — ideal for small business owners or active investors.
Pros:
Flexibility to access funds anytime
Pay interest only on the amount used
Can help with short-term cash flow gaps
Cons:
Requires financial discipline
Interest rates may be higher than traditional home loans
2. Mortgage Top-Ups
This involves increasing your current home loan to release some of the built-up equity as cash. The additional amount is added to your mortgage and repaid over time — usually at your current home loan rate.
Pros:
Lower interest rates compared to business loans
Fixed repayment terms help with budgeting
Can be used for anything — business, renovations, investments, etc.
Cons:
Increases total debt and repayments
Extends the term or cost of your mortgage
3. Cross-Collateralisation
In this strategy, the equity in one property is used as security for a loan on another property — typically used when purchasing investment properties or expanding a property portfolio.
Pros:
Allows you to acquire new assets without additional deposit
Maximises borrowing power across properties
Cons:
Properties become financially linked — selling one can become complex
Lender has more control over your property portfolio
Is Using Equity Right for You?
The right option depends on your financial goals, cash flow needs, and appetite for risk. While using home equity can accelerate business growth or investment returns, it also puts your property on the line — so it’s crucial to have a clear repayment plan and risk management strategy in place.
Get Personalised Advice
Before making a move, speak with us. We’ll assess your situation, explain the pros and cons of each strategy, and help you structure your borrowing in a way that protects your assets while supporting your goals.
Smart planning today can set the stage for sustainable growth tomorrow.
Ready to unlock your equity potential?
Get in touch — our advisors are here to guide you every step of the way.