Lots of good info above for sure. My second IP was purchased purely with the equity from my first IP after about 3yrs of buying it. To buy my 2nd, i had to pay about $500 of my own money including purchase costs.

I got a great deal and for 18 months that property cost me nothing even at just over 100% finance as the rent was great and in that time it doubled in value. I recently sold it making about 80K after selling costs. and will use this money to fund another 1 or maybe even 2 more IP’s.

I personally cant see the point in selling one 300K property to buy another 300K odd property just to reduce the morgage. (which is what you are kind of talking about). I also think that 20% deposit is the maximum you want to put into a deal, generally speaking.

My advice in your situation is to rent out your house, move into a cheap rental, and use the equity in your home (consider using Mortgage Insurance to get the most equity out of it) and use it to purchase another property. Work hard to find a property worth buying at the higher LVR. This is where your money is made.

I worked these rough figures:

You have 170K equity currently. 300K-130k=170K

Of this, the bank will happily lend you 80% of 170K = 136K.

This is more than enough to buy 1 or even 2 properties.

Then you will have 3 propertyies wont you?

If you use Mortgage Ins then you will have access to $161500 to fund deposits with.

Assuming the bank values your house at 300K of course.

Hope this helps you a bit.