I Have Equity in My Properties. Should I Use It to Buy Another Investment Property?
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Having equity in your existing properties can help finance another investment, but it doesn't automatically mean buying again is the right decision. Before using your equity, you need to consider borrowing capacity, cash flow, financial reserves and whether another acquisition supports your long-term property investment strategy.
For established Australian property investors, the question isn't simply how much equity you've accumulated. It's how effectively that equity can support your next financial decision.
What Is Property Equity and How Does It Work?
Property equity is the difference between a property's current market value and the outstanding loan secured against it.
For example, if your investment property is worth $1 million and you owe $500,000, you have approximately $500,000 in equity.
However, total equity and usable equity are different.
Lenders generally apply loan-to-value ratio limits and assess your ability to repay additional debt before allowing you to access equity.
This means an investor with substantial property wealth may still be unable to finance another acquisition.
Should You Use Equity to Buy Another Property in 2026?
Using equity may be worth considering when another property could strengthen your overall portfolio.
However, investors should first assess:
- How much equity is accessible under their lender's requirements
- Whether their income can support additional repayments
- How the new property will affect cash flow
- Whether the acquisition improves portfolio diversification
- How much liquidity will remain after purchasing
A property that appears attractively priced may still create financial pressure if it increases debt beyond a sustainable level.
Why Interest Rate Risk Matters
The Reserve Bank of Australia's October 2026 Financial Stability Review examined a severe adverse economic scenario involving a 5.60% cash rate, 6.3% unemployment and 7% inflation.
These assumptions were used for financial stability stress testing, not as forecasts.
For property investors, this highlights the importance of understanding whether their portfolio could withstand higher financing costs or weaker economic conditions.
Investor Scenario: $700,000 in Property Equity
Consider an investor who owns two investment properties with approximately $700,000 in combined equity.
They are considering buying a third property after observing softer prices in their preferred market.
Before proceeding, they need to determine how much equity can actually be accessed, whether they qualify for additional lending and how the purchase would affect their ongoing repayments.
They should also consider whether the acquisition would leave sufficient funds available for unexpected expenses.
The decision should be based on the strength of the overall portfolio, not simply the availability of equity.
Watch The Ramsey Report: Should You Use Your Equity to Buy Again?
Having substantial property equity doesn't automatically mean you're ready to purchase another investment property.
In the latest episode of The Ramsey Report, Ewan Ramsey, Founder and CEO of Ramsey Property Wealth, joins Dr Prabath, our in-house Property and Finance Economist, to discuss how established investors can assess usable equity, borrowing capacity and cash flow before making another acquisition.
They explore why a softer property market may create opportunities, but why the decision to buy should always be supported by a sustainable financial strategy.
Watch the full episode to understand how your existing equity could influence your next property investment decision.
YouTube Button: https://youtu.be/vUNjKTWfzLg
Related Reading: Australian Property Markets in 2026
Before using your existing equity to purchase another investment property, it's important to understand whether current market conditions support your decision.
Read our recent article, Australian Property in 2026: Why Some Markets Are Falling While Others Grow, to explore how interest rates, local market conditions and borrowing costs can influence investment decisions.
Article Contributors
Written by: Ewan Ramsey
Founder and CEO, Ramsey Property Wealth
Research by: Dr Prabath Morawakage, PhD, CPA
Head of Property Economics and Intelligence, Ramsey
Property Wealth
Ready to Put Your Property Equity to Work?
Understand how using your equity could affect your borrowing capacity, cash flow and long-term property investment strategy.