Lock it in! How to protect your equity


Don’t be caught without it.

As a property investor who is building a portfolio, it’s vital that you have access to your equity whenever you need it. 

There’s nothing more frustrating than finding that perfect new property to purchase, only for it to be held up – or worse still, lost completely – because your finances weren’t in good shape.

Having an interest-only loan structure with a healthy off-set account is a great way to ensure you have equity at your fingertips whenever you need it, but that’s not the only way…

With a bit of time and commitment, there is another strategy you can employ to take advantage of your equity called – Equity Lock. 

Equity Lock in simple terms is locking in the highest value for your property’s possible at different times and refinancing your loans to reflect and draw on the increased value. Confused? Let’s break it down.


STEP 1 – Buying A Property

.Congratulations – you’ve just added a new property to your portfolio.

As research, resources and a bit of luck would have it, you’ve bought a great little apartment in a booming area.

Over the course of a few years the market shifts and your $500,000 purchase is now worth $1 million. How do you know this?


STEP 2 – Keeping your eye on the Market

If you’re buying property with a view to build a portfolio over time, then you need to get familiar with the property market and notice when it changes.

Equally, watching what similar size/value properties are selling for in the same area will give you a good idea of what your property is worth and if the value is increasing significantly.

If and when it does is the time to make a move.


STEP 3 – Equity Lock

So, your property has increased in value by a whopping $500,000. While you don’t want to sell, and you don’t need the extra cash today, locking that value in so you can use it when you do need it, is smart.

All you need to do is speak with your bank to refinance your loan. You can “borrow” up to 80 per cent of the new value without mortgage insurance, and it’s always going to be there, even if the value of the property adjusts.


STEP 4 – Act Quickly

Once you know the value of your property has increased enough to warrant refinancing, don’t wait. Lenders are usually happy to offer good loan conditions and rates when the market is on the up, and less happy to oblige when it’s stabilising or flattening out. 


STEP 5 – Be Disciplined

Equity Lock doesn’t happen by itself and it takes a fair amount of work and commitment from you.

Keeping track of valuations and the market is something you’re going to need to do very regularly if it’s going to work in your favour.

But the time really can pay off in the long run and end with you having enough equity up your sleeve to swoop in on your next purchase with no delay.


Are you giving yourself the best chance of success?

Good property investors are nimble and adapt fast. They stay informed and enrol a team of experts to help them excel in times where others can’t. But most importantly, they start with a plan that is deliberate and based around the goals they wish to achieve.

To find out how you can be one of those people, come along to one of our free Property Investor Night events.

Here you’ll be equipped with the tools, resources and support to thrive, and most importantly, not make the fatal mistakes that others make when they fail to have a strong plan in place that can properly maximise their potential and the opportunities that are available to them.

Spots are limited so go here to book your spot for the next Property Investment Seminar now


Jason Whitton

Founder – Positive Real Estate