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Finance

Unlock your equity. Keep the next purchase possible.

Lending strategy for property investors: how much of your equity you could use, what limits your borrowing, and how to structure each loan so it does not block the next one. The lending advice comes from Fouracre Financial, part of InvestorKit Group.

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Unlocking equity

Not all of your equity is usable. Here is the part that is.

Equity is your property's value less what you owe on it. Lenders rarely let you use all of it. A common first estimate takes 80% of the lender's valuation, then subtracts the loan.

Usable equity can fund the deposit and costs on your next purchase without saving them from scratch. It is still borrowing: it adds to what you owe, and the lender has to agree you can repay it.

Worked example from our equity guide

Property value$800,000

Still owing
$400,000
Total equity
$400,000
Usable equity, first estimate
$240,000

80% of $800,000 is $640,000. Less the $400,000 still owing leaves $240,000.

Illustrative only. Your usable equity depends on the lender's valuation, its credit policy and whether you can afford the repayments.

Borrowing capacity

Equity opens the door. Borrowing capacity decides how far.

Borrowing capacity is what a lender decides you can afford to repay. These are the levers that move it, and why two lenders can give the same investor different answers.

  1. 01

    Income and living costs

    Lenders check that your income covers your living costs, your other debts and the new repayments. Some count only part of your rent, or of income that changes month to month.

  2. 02

    Debts and credit limits

    Existing loans count against you, and so can a credit card limit, even with nothing owing on the card.

  3. 03

    The serviceability buffer

    At the time of writing, APRA expects banks to assess new loans at least 3 percentage points above the loan's rate. The lender tests your repayments at that higher assessment rate, which is not the rate on your loan.

  4. 04

    Bank debt-to-income limits

    At the time of writing, APRA limits how many new home loans each bank can make at six times income or more, a rule in place since 1 February 2026. Loans for newly built homes and owner-occupier bridging loans are excluded. It limits the bank, not you, but it can shape which lender suits.

  5. 05

    Lender policy and ownership

    Each lender treats rent, trusts, companies and your existing loans differently, so the lender you use, and the order you use them in, can preserve capacity for later.

When the first answer is no: the questions Fouracre's brokers work through

Is the first lender's answer the only answer?
Lenders sit in tiers and assess the same income differently.
What could time change?
Rent and income growth can lift capacity over months, not only with a new job.
How should the property be owned, and the loan structured?
Ownership and structure change what each lender counts.
What loan-to-value ratio makes sense?
Borrowing more than 80% of the value usually means lenders mortgage insurance; borrowing less ties up more of your cash.
Which loan term and repayment type?
The term and the repayment type change the repayments a lender tests you on.

General information only. Fouracre's brokers work through these with you and give the credit advice; InvestorKit does not.

Structure and sequence

Structure each loan for the purchase after it.

One lending decision can lock you out of your next purchase, squeeze your cash flow or stall a portfolio for years. Fouracre's brokers look at the whole portfolio and where it is heading, not just this loan.

  1. Standalone loans, not crossed ones

    Each property backs its own loan, with equity drawn as a separate loan. Cross-collateralised loans can make it harder to sell one property, switch lenders or use its equity later.

  2. Interest-only or principal and interest

    Interest-only repayments are lower at first, but they repay none of the debt and rise when the period ends. The right mix depends on your cash flow and your plan.

  3. Offset, not just redraw

    Cash in an offset account cuts the interest charged without being paid into the loan, so it stays yours to use for the next deposit or a rainy day.

  4. Lender order

    Some lenders cap how many properties you can hold or discount rent heavily. Approaching them in the right order preserves capacity for the properties ahead.

  5. Buffers before you buy

    Agree the cash you keep in reserve for vacancies, repairs and rate rises before you commit, so the plan survives a bad month.

  6. SMSF and trusts

    Lending for a self-managed super fund or a trust, alongside your accountant and financial adviser.

Read: 3 lending traps that stall a portfolio

Who does the lending

Fouracre Financial, part of InvestorKit Group.

Fouracre Financial is the mortgage broking business in InvestorKit Group. It gives the credit advice, compares lenders and handles the loan from application to settlement. InvestorKit itself does not give credit advice.

30+
lenders on Fouracre's panel, by its own published figure
No fee
Fouracre says the lender pays it a commission when your loan settles
Visit Fouracre Financial (opens in a new tab)
  1. 01

    Portfolio review

    Your properties, loans, equity and cash flow, and where you want to go.

  2. 02

    Strategy and structure

    Lenders chosen and each loan structured to keep capacity for the properties ahead.

  3. 03

    Application to settlement

    Submissions, valuations, conditions and settlement.

  4. 04

    Ongoing review

    Your lending kept under review as the portfolio grows.

A referral to Fouracre does not guarantee credit approval or replace its own disclosures and consents.

Proof

Investors who put their equity to work.

A published client journey and our latest coverage on lending and borrowing.

Brenton Russo beside text about building a multimillion-dollar property portfolio

Client storyBrenton Russo

From a Bank's "No" to $1M+ in Equity Across Two States

Brenton had already bought two properties on his own before working with InvestorKit, and the bank told him he couldn't borrow again. He'd followed the advice most people get at a family barbecue: buy something close to home, buy what's affordable. Both units covered themselves, but neither built any real equity, and the bank's answer left him stuck. With InvestorKit, Brenton went on to buy two carefully chosen properties in Brisbane and Adelaide that have since created over $1 million in equity. Here's his story.

Individual results vary. Past performance is not a reliable indicator of future performance.

Questions

Questions, answered.

See every question

Plan the loan before the property.

Book a free 15-minute call. We'll talk through your equity, your borrowing and the purchase you have in mind, and if you'd like lending advice, introduce you to Fouracre Financial.

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