This is how you use equity.

This is how you use equity. So let's say this is your home. You bought it for $800,000 with an 80% loan, so you owe 640k with a deposit of 160 grand. Over time, the market moves and the property grows to $950,000, but your loan stays the exact same at $640,000. So now, even though nothing changed with the loan, your LVR drops to about 67% and your equity increases to around 33% or $310,000. But here's the part most people miss. You can't use all the 310 grand. Banks will usually only lend back up to 80% LVR. So 80% of 950 is 760. You already owe 640,000. So this means you can use $120,000 in usable equity. So when you refinance, you split the two loans. One loan stays at 640k as a principal place of residence debt, which is non-tax deductible, and the second loan, which is a $120,000, is your investment debt, which is tax deductible. That 120k is used for a deposit and costs on your investment property. So even after doing this, you still have $190,000 in remaining equity sitting in your property, and you've got the 120k debt in investment debt and the PPOR debt of 640, which we just spoke about. But equity in itself isn't free money. It's borrowed funds, and if you don't structure it properly, you lose the benefit. So if you want more tips like this, follow us on TikTok and Instagram.