Leveraging Home Equity for Investment
Robbie Shepherd | 19 September 2025
If you have had your home for a few years, chances are you have built up some equity. That is the difference between what your home is worth and what you still owe. For many people, this is their biggest financial asset. Instead of letting it sit there, you can use that equity to invest and grow your wealth. The key is knowing how it works and using it wisely.
How equity works
Let us say your home is worth $900,000 and you owe $500,000. That gives you $400,000 in equity. But banks usually lend only up to 80 percent of a property’s value. So, in this case, 80 percent of $900,000 is $720,000. That means your usable equity is $220,000. You can access it by topping up your mortgage, setting up a revolving credit account, or taking out a separate loan. The process is straightforward, but the decisions around how you use it matter.
Putting equity to work
Using equity is a way to move faster. You are using what you already have, rather than saving a fresh deposit. That $220,000 could help you buy a rental, invest in shares or funds, or support a business. Property is the most common choice because it feels solid and offers long-term growth. Shares and funds can be more flexible, and business investment has the highest upside but also the most risk. No matter the option, borrowing against equity increases your debt. If rates rise or your investment dips, the pressure can build quickly. And because your home is the security, you need a clear plan and a buffer.
Final thoughts
Equity is a powerful tool if you use it well. It can help you build wealth faster, but it is not free money. Make sure the numbers work, understand what you are investing in, and have a plan B. Used wisely, it can be the next step in your financial journey.