15 May 2026 Using Equity To Buy A Home in South East Melbourne, The 2026 Guide
Homeowners in South East Melbourne are sitting on substantial equity, and many don’t realise how much borrowing power that creates. Whether you’re looking to upsize, downsize, buy an investment property, or help adult children into the market, your existing property’s value could be the key to your next purchase.
The challenge isn’t having equity, it’s knowing which lenders assess it most favourably and which loan structures make the most financial sense. Whether you’re considering properties in Toorak – Glen Iris or St Kilda, lender policies on equity release vary significantly.
EverLend helps homeowners across South East Melbourne structure their equity release across 60+ lenders, completely free of charge.
Here’s what you need to know about using equity to fund your next property purchase in South East Melbourne.
Key takeaways
- Most lenders let you borrow up to 80% of your property’s value, minus what you owe.
- Loan structure matters: keeping investment debt separate simplifies tax and refinancing.
- Lender equity release policies vary widely, so comparing across 60+ lenders is essential.
Why is equity release worth considering right now?
Equity release lets you borrow against the value you’ve built in your home at home loan rates, rather than the higher rates of personal loans or credit cards. Property values across South East Melbourne have created significant equity positions for homeowners, particularly those who bought before 2020, and that gap between what you owe and what your property is worth is real borrowing power.
With competitive variable rates from approximately 5.70% p.a. and the APRA serviceability buffer held at 3.0%, lenders assess new equity borrowing at around 9%. That means your income needs to support the additional repayments, which is exactly why lender selection and loan structure make a meaningful difference to what you can access.
How much equity can you actually access in South East Melbourne?
Most lenders allow you to borrow up to 80% of your property’s current value, minus what you still owe. Some specialist lenders go to 90% or 95% for specific purposes like investment purchases or family guarantees.
If your Bentleigh home is worth $1,745,000 and you owe $700,000, you have $1,045,000 in equity. At 80% LVR, you could potentially access up to $696,000 ($1,745,000 x 80% = $1,396,000, minus the existing $700,000 debt). The exact amount depends on your income, existing debts, and which lender you approach, which is exactly what we work through with you in a consultation.
Up to 80% LVR
The standard maximum most lenders allow when releasing equity, calculated against your property’s current valuation minus existing debt.
What schemes apply when buying with equity in South East Melbourne?
Key considerations for equity-funded purchases:
- ›No stamp duty concessions for existing homeowners: equity release purchases don’t qualify for first home buyer concessions, so stamp duty applies at standard rates.
- ›Downsizer superannuation contributions: if you’re 55 or older and selling to downsize, you can contribute up to $300,000 per person ($600,000 per couple) to super from the sale proceeds, provided you’ve owned the property for 10 or more years and meet the 90-day deadline from settlement.
- ›Investment property depreciation: if using equity to buy an investment property, the building and fixtures may qualify for depreciation deductions. Consult your accountant for the tax implications specific to your situation.
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How do mortgage brokers help homeowners access equity in South East Melbourne?
Step 1: Talk to us
Get in touch and we’ll assess your current position, your equity available, and what you’re looking to achieve with the funds.
Step 2: Property valuation
We arrange a current valuation of your existing property to establish your precise equity position and maximum borrowing capacity.
Step 3: Lender comparison
We compare which of our 60+ lenders offers the best equity release terms for your situation, because rates, LVR limits, and approval criteria all vary.
Step 4: Structure recommendation
We recommend the optimal loan structure, whether that’s refinancing your existing loan with additional funds, a separate equity loan, or a line of credit facility.
Step 5: Application lodgement
We lodge your application with all supporting documentation and manage the approval process through to settlement.
Step 6: Settlement coordination
We coordinate with your solicitor to ensure funds are available when you need them for your purchase or project.
What mistakes do homeowners make when using equity to buy property?
The biggest mistake homeowners make is assuming their bank will offer the best equity release terms just because they hold the existing mortgage. Banks often have restrictive equity release policies for existing customers, and many don’t actively compete for business they think they already have.
Another common error is structuring equity release as a basic refinance when a split loan or line of credit might be more tax-effective and flexible. If you’re buying an investment property, keeping the investment portion separate can simplify tax deductions and make future refinancing easier.
What are the tax implications of using equity for property purchases?
Using equity to buy an investment property creates tax-deductible debt, but the structure matters for maximising deductions. The portion of your total debt that relates to the investment property can be claimed, but you need clear separation in your loan accounts.
If you’re using equity to buy your next home rather than an investment, the interest on that portion isn’t tax-deductible. Your accountant can advise on structuring loans to preserve future deductibility if your circumstances change.
How loan structure affects your tax position:
- ›Investment purchases: keep investment debt separate from personal debt for cleaner tax deductions and easier refinancing later.
- ›Next home purchases: consider whether you’ll convert your existing home to an investment after moving, as this affects how you should structure the loans from the outset.
- ›Family assistance: using equity to help children buy can create complex tax implications. Get advice before proceeding.
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Like to know which banks & lenders work best for using equity? Know where you really stand and what’s possible, so you can plan with total confidence. 5.0 on GoogleLocal expertsFree service
Prefer to talk now? Call 03 7036 3356 |
Frequently Asked Questions
How much equity can I access from my South East Melbourne property?
Most lenders allow up to 80% LVR, meaning you can borrow up to 80% of your property’s value minus what you still owe. Your exact amount depends on your property’s current valuation and your income capacity to service the additional debt.
Is it better to refinance or get a separate equity loan?
It depends on your current interest rate and loan terms. If you have a competitive rate, a separate equity loan might preserve those terms while accessing funds at market rates for the additional amount.
Can I use equity to help my children buy their first home in South East Melbourne?
Yes. You can use your equity as security for your children’s loan through a family guarantee, or provide cash from an equity release for their deposit. Both options have different risk profiles and tax implications.
What’s the difference between a line of credit and refinancing for extra funds?
A line of credit gives you access to approved funds when you need them, with interest charged only on what you use. Refinancing provides cash upfront but you pay interest on the full amount immediately.
Do I need a new valuation to access equity from my property?
Yes. Lenders require a current valuation to establish your property’s market value and calculate available equity. We coordinate this as part of the application process.
Should I use a mortgage broker or go directly to my current lender for equity release?
A mortgage broker, every time. Your current lender may not offer competitive equity release terms, and they have no incentive to compete since they already hold your mortgage. We compare 60+ lenders to find the best structure for your situation.
Can I use equity to buy an investment property in South East Melbourne?
Absolutely. Using equity for investment purchases is common and the interest is typically tax-deductible. We help structure the loans to maximise tax benefits and borrowing capacity.
Your Next Steps
Your equity position in South East Melbourne could open doors you haven’t considered yet. The right loan structure can make the difference between a stressful financial stretch and a comfortable transition to your next property goal.
Ready to find out how much equity you can actually access and which structure works best for your situation? Contact the EverLend team for a free consultation or call 03 7036 3356. We’ll assess your equity position across 60+ lenders and structure the most suitable option for your goals.
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External Resources
EverLend · St Kilda and South East Melbourne · General information only – this article does not constitute financial advice. Please consider your own circumstances and seek professional advice before making any financial decisions. · Last updated 16 July 2026