Client story · Investment
Buying a First Investment Property in Parramatta Using Home Equity
A couple in their late thirties had paid down a good chunk of their home loan and kept asking themselves whether they could put that equity to work. They could, and they did.
$0
cash deposit needed
~$650k
investment property price
Equity
funded the deposit and costs
Where they started
They owned their home outright enough to have real equity sitting there, but the idea of saving a fresh deposit from scratch felt like starting over. What they didn't realise is that the equity in their own home could do the heavy lifting. You often don't need cash in the bank to buy an investment property. You need a plan for the equity you already have.
How the structure worked
The move here was to release a portion of their equity as a separate loan, then use that as the deposit and to cover buying costs like stamp duty and legals. The investment purchase itself was funded by a second loan against the new property. Keeping the two loans separate matters, because it keeps the investment borrowing clean for tax time. I always tell people to check the tax side with their accountant, since that is their lane, not mine.
- Valued their existing home to confirm how much usable equity they really had.
- Set up an equity release to cover the deposit plus stamp duty and costs, so nothing came out of their savings.
- Matched the investment loan to a lender comfortable with the rental income and their overall position.
- Structured the loans separately and talked through interest-only versus principal and interest for the investment debt.
The result
They settled on a roughly $650,000 property in the Parramatta area that rents well and sits close to transport and jobs. They didn't touch their cash buffer, the rent covers a solid part of the holding cost, and they now own two properties instead of one. Results vary with the market and your own numbers, but the point is they finally used what they had built.
Something I stressed with them, and stress with every investor: don't borrow to the very edge. An investment property has holding costs, and there will be weeks it sits empty between tenants, or a year the rates and insurance jump. We built in a buffer so a quiet patch or a rate rise wouldn't put them under pressure. Owning two properties is only a win if you can comfortably hold both. Getting that balance right matters more than squeezing out the biggest possible loan.
Equity is only useful if it's usable
Lenders won't let you draw every dollar of equity, and how much you can access depends on your income and the property. I'll map out your real, usable position before you fall in love with a listing. Start with investment property loans.
Frequently asked questions
Can I really buy an investment property with no cash deposit?
In many cases, yes, if you have enough usable equity in a property you already own. The deposit and costs come from the equity release instead of your savings. Whether it works for you depends on your income and valuation, so let's check your numbers.
Should the investment loan be interest-only?
It depends on your goals, cash flow, and your accountant's advice. Interest-only can help investment cash flow, but it isn't automatically right. I'll walk you through the trade-offs so you can decide with your accountant.
Important information
This information is general in nature and does not take your personal objectives, financial situation, or needs into account. It is not credit assistance or a recommendation to enter into any particular credit contract. Consider whether it is right for you and seek advice before acting. Lending is subject to a lender's eligibility and approval criteria. Terms, conditions, fees, and charges apply. Client details are shared with permission and may be anonymised. Individual results depend on your circumstances.
Greenwood Finance · ABN 23 671 049 693 · Credit Representative No. 551942.
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