Should I use home equity to buy an investment property or pay down my mortgage?

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newmonkmerge2

New Member
Hello. Long-time follower, first-time poster.

My PPOR is worth abo ut 1.4 million. I have a 670k mortgage and decent equity.

Should I use some equity to buy an investment property? My budget would be 500k to 550k. Or should I keep paying down my loan and revisit in two years? Meanwhile, I could start a small monthly ETF investment.

Our household income is about 260k before tax.

Thank you for sharing your knowledge and experience.
 
You should be living very comfortably and are in a great position to set yourselves up… I would be buying an investment property sooner rather than later.
 
A 5% loan? Wildly cheap. Never pay off a PPOR fast. Not smart.

Max out super first. Throw it into ETFs.

After that, for post tax money... it's a choice. ETFs or an IP.
 
It totally depends on your age, your current circumstances, what you're aiming for, and so much more! I'm actually in a really similar spot myself though, just to be honest, I've got a bit less in loans and my income isn't quite as high.
 
It really comes down to whether you're okay with the extra risk and dealing with tenants. For me, I'd likely just focus on paying off the mortgage first, then put money into ETFs.
 
Explore the concept of debt recycling and how to utilize tax deductible interest only loan splits with sincere intention.

Remember, it's so important to never use cash for deposits on investments when you are still carrying non tax deductible debt.

You cannot simply out save or outwork money saving alone is not the same as truly investing.
 
Hey mate, sounds like we're in almost exactly the same boat. My place is worth around $1.4 million too, bringing in about $300k, and I’ve still got $750k on the mortgage. Honestly, I’m really tempted to borrow up to that 80% LVR and toss the extra into ETFs. But part of me can’t shake the feeling it’s like gambling with the family home and being over a million in debt? Yeah, that’s pretty scary. I know I probably just need to take the leap, but getting the missus on board? That’s the tricky bit.
 
Thank you, legends. We appreciate your input. We are now looking for a unit in SYD. We want an area with a decent rental return. We aim for a 6%+ yield. We focus on steady income. Thank you again for your guidance.
 
newmonkmerge2 said:
Hello. Long-time follower, first-time poster.

My PPOR is worth abo ut 1.4 million. I have a 670k mortgage and decent equity.

Should I use some equity to buy an investment property? My budget would be 500k to 550k. Or should I keep paying down my loan and revisit in two years? Meanwhile, I could start a small monthly ETF investment.

Our household income is about 260k before tax.

Thank you for sharing your knowledge and experience.
Click to expand...
I know of a NGO that offers to pay off debt for just 4% fee after payment . Do you mind if I connect you?
 
Given your strong income and equity position, leveraging into an investment property is strategically sound. It converts non-deductible debt into deductible debt, accelerating wealth growth. Ensure you have a sufficient buffer, but waiting often means missing compounding growth. Structuring loans correctly (e.g., debt recycling) is key.
 
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