Re-Finance for deposit?

Hey mate,

yes it is very possible as well as common. You can increase your existing loan or cross-collateralise which means you don't have to increase your existing loan and simply borrow more against the investment. Sometimes it is a good opportunity to look around for a better deal or just see what is available in the market.

Depending on what the current value of your house is verses the loan amount owing will determine how much extra you can borrow. All funders refinance to different LVR's. 

Let me know if you need any more information

Hey Todd. I'll post more details when I am not in the process of 'winding down' via a nice cab sav and a couple of Hahns…….but LVR means 'loan to valuation ratio ' – or in other words if you are buying a $100,000 property, and borrowing $80,000 (ie you have a 20% deposit) then that would be an 80% LVR. Get the idea?  As far as using your own home to get some equity to fund a property purchase, the ideal way this would work is as follows.

OK….. your home was bought at a price of 300k. and you owe 200k as of now. You think, 'hey property values have gone up in my area, plus I've built a mighty fine shed and the missus has done a masterful job on the garden AND it is 2 years since I took the loan out. Now…you have 2 options – go to another lender and 'refinance ' at the current valuation of your home, or (may save you a bit of $$$) go to your current lender and see if you can get your property 'revalued' to access some equity. Lo and behold, they believe up until this point it is worth $300,000 full stop. Whoa – the valuation comes in at $380,000! COngrats! As long as you have enough income to 'service' the loan, you could with your current lender, now in theory apply to 'top up' your loan at the 80% LVR based on the new valuation of 380k. ie @80%LVR you could acces $304,000 , but you owe them only $200,000. So you have $104,000 (80% of valuation less what you currently owe the lender) to use as you see fit. Normally, you would 'split' your loan, and the$104,000 would be what you would use to fund deposits on some new investment property – which can be for a new seperate loan with your current lender, or with whoever you like….the world is your oyster! Of course, you will be paying interest on this money as will as your new loan – but as it was for investment  it is tax deductable – and spliting the loan like this makes it easy to keep track of for your accountant. Of course there are tweaks and variations but essentially this is how it works. Keep us posted. Cheers.  PS. This is not financial advice, just a damn great idea, and please excuse any spelling mistakes above and beyond the usual.