At Oliver Mortgage & Insurance, we understand the need to build a property investment portfolio and the leveraging of equity and we help our clients do this successfully.

Any property owner, irrespective of age, who has reasonable equity in their residential property, is able to borrow funds for property investment purposes.

Equity is the difference between a property's current market value and the current level of mortgage secured against that property.  

Here is an example of using existing equity to fund property investment.

A property that has a current market value of $350,000 and an outstanding mortgage of $225,000 has equity of $125,000.

This is 35.7% of the property value and would be considered suitable equity for leveraging the purchase of another property. Leveraging is where an existing property is used as collateral security so that another property purchase can be 100% funded on borrowed money.

In this scenario the owner of that property could use the equity to purchase a further residential property as a rental investment and borrow the total amount of the purchase price providing the purchase price was at a reasonable level.

A purchase price of $300,000 for the rental property with the total amount borrowed would result in total lending of $525,000 secured against property values of $650,000.

This is a loan to security ratio of 80.8% and is an acceptable level of borrowing with most lenders.

Each lender has different criteria and lending levels for investment property. With all lenders however, a crucial factor is your ability to repay or service the proposed level of debt from your cash flow. Before you begin with further purchases let our free expertise assist you in determining your borrowing capabilities and guiding you through the process. We will make it easy and get the most suitable option for your specific needs!

Prospective property investors may have savings to provide a cash deposit rather than borrow the full 100% of the purchase price. Either way at Oliver Mortgages & Insurance we will be able to assist you with your financing requirements, advise on loan structure, property ownership and taxation benefits as well as enable you to grow your property investment portfolio.

For more information about starting or expanding your property investment portfolio simply call us on 0800 800 333