Equity

Equity is the difference between what your property is worth and what you still owe on it. If your property is worth $700,000 and your loan balance is $450,000, your equity is $250,000. Equity grows two ways: capital growth (the property value rising) and amortisation (the loan balance falling as you pay it down). Investors use equity as the deposit for the next purchase - typically banks will lend you up to 80% of the property value, so 80% of $700,000 is $560,000, minus your existing $450,000 loan, gives $110,000 of usable equity. Refinancing to release equity is the standard path to scaling a multi-property portfolio without saving each new deposit from scratch.