Perth home values rose 23.9% in the year to June 2026, on Cotality's figures. If you own a $950,000 house there, the market added roughly $183,000 of equity in twelve months, and you didn't save a cent of it. Brisbane owners collected 17.4%. Most of that new wealth sits behind a single number: the 80% line your lender draws through your home's value.
That line is the real gatekeeper. An equity release turns the growth into a deposit for an investment property, and in Australia the size of the release comes down to the cap. Through Wity, any borrower can release equity to 85% of their home's value with no LMI, and certain professions can go higher still.
The timing is unusual. The RBA lifted the cash rate in February, March and May 2026, held it at 4.35% in June, and meets next on Tuesday 11 August 2026. Rising rates thin the field: fewer bidders, softer auctions, vendors more willing to deal. Cotality's June 2026 data shows a two-speed market, with Perth and Brisbane running hot while Sydney and Melbourne drift lower. Owners in the growth cities hold more usable equity than they did a year ago, at exactly the moment competition for the next purchase has gone quiet. The 12 May 2026 federal budget put a date on part of the decision, too.
What is usable equity, and how much can you reach?
Equity is your home's value minus what you owe. Usable equity is smaller. A lender will typically let your total borrowing run to 80% of the property's value before LMI applies, so the slice you can release is 80% of value minus your current loan. This is an ordinary refinance or loan increase against your own home, not the reverse-mortgage product sold to retirees under the same name.
Under the specialist lending policies available through Wity, the line moves. Any borrower can release equity to 85% of value with no LMI. Senior professionals such as lawyers and chartered accountants can reach 90%, as can nurses, midwives and allied health professionals; doctors and dentists can reach 95%. Five percentage points sounds small. In dollars it isn't.
| Home value | Loan owing | Usable at 80% (typical lender) | Usable at 85% (Wity, no LMI) |
|---|---|---|---|
| $800,000 | $520,000 | $120,000 | $160,000 |
| $950,000 | $660,000 | $100,000 | $147,500 |
| $1,200,000 | $780,000 | $180,000 | $240,000 |
One caution before you count it. Valuers run conservative on equity releases: a desktop valuation for a refinance often lands under what the same house would fetch on a Saturday afternoon, and the valuation, not your estimate, sets the usable figure.
How does an equity release for an investment property actually work?
You've been told to save a deposit. For years. For the second property, the market has been saving it for you; the only question is which cap you're allowed to count it at.
The mechanics are a four-step sequence. The lender values your home. You refinance or increase your loan, taking the released amount as a separate split. That split covers the deposit and purchase costs on the new property, and a second loan, secured by the investment alone, covers the rest of the price.
Two rules do most of the work. First, keep the released amount as its own split. The ATO's purpose test follows what borrowed money buys: interest on a split that traces entirely to the investment purchase is deductible, while money blended with private debt leaves your accountant apportioning a mixed loan for as long as it exists. The same purpose logic powers debt recycling, if you want to take the structure further.
Second, keep the two properties on separate loans. Lenders will happily secure one big facility against both homes; that is cross-collateralisation, and it hands the lender control you'll want back the day you sell or restructure. The release is also the natural moment to test your whole loan, because if your rate was borderline before, you're about to reprice anyway. Should you refinance covers that call.
What did the 12 May 2026 budget change for investors?
The cut-off has already passed. Established investment properties bought after Budget night, 12 May 2026, lose wage-offset negative gearing from 1 July 2027: a net rental loss on those purchases will no longer reduce the tax on your salary. The loss isn't destroyed, though. It's quarantined, still deductible against your residential rental income, including the eventual gain when you sell, and carried forward until it's used. New builds keep the wage offset. Anything you held on Budget night keeps its negative gearing treatment.
Follow it through. Buy an established unit with your released equity today and, from 1 July 2027, the rental shortfall most geared properties run in their early years stops working against your wage tax. Buy a new build and it still does. New builds also sit outside APRA's cap on high debt-to-income lending, live since 1 February 2026, so the policy settings now lean the same direction twice.
Established property can still win on land value, location and rent. But the release you model should price the tax difference in before you sign anything, and the exit maths shifts too: gains accrued from 1 July 2027 move from the 50% CGT discount to indexation with a 30% minimum tax, while gains built up before that date keep the discount.
Will you pass the serviceability test?
Releasing equity is new borrowing, and the lender reassesses your whole position. APRA's 3% buffer means your home loan plus the new investment debt is tested at the actual rate plus three percentage points, and most lenders count only about 80% of the expected rent while counting all of the expenses. Then there's the newer gate. Since 1 February 2026, APRA has capped high debt-to-income lending, with no more than 20% of a bank's new loans allowed at six times income or above, and a second property often pushes total debt past that six-times line. Some lenders will have room in their cap that month. Others won't.
That spread is the point of the Wity Borrowing Power Assessment: it models your capacity across 45+ lenders rather than one bank's calculator, which is how an owner knocked back by their own bank finds two lenders who treat the same file as ordinary. And if this purchase is meant to be the first of several, sequencing matters as much as capacity; building a property portfolio covers the ordering.
Nadia and Tom: one Bayswater house, two caps
Nadia manages projects for a WA builder; Tom teaches high school in Morley. Their house in Bayswater, in Perth's inner north-east, is valued at $950,000 with $660,000 owing, and they want a $700,000 new-build townhouse so the negative gearing survives the budget change. Entry cost: a 15% deposit of $105,000 plus roughly $30,000 in stamp duty and costs, call it $135,000.
At a typical lender: the cap is 80% of value, or $760,000, so their usable equity is $100,000. They're $35,000 short. Their choices are to keep saving while Perth keeps compounding away from them, or to push the release past 80% and pay LMI for the privilege.
Through Wity: the cap is 85%, or $807,500, so usable equity is $147,500 with no LMI on the release. The $135,000 entry cost is covered, with change left over as a buffer. The purchase loan of $595,000 sits at 85% of the townhouse's value, and under the same policy the LMI on that loan, typically $8,000 to $12,000 at this size, is waived too. Investors rarely get that waiver anywhere in the mainstream market.
The difference: roughly $20,000 of LMI avoided across the two loans, and a purchase made this cycle rather than two years and one more Perth growth spurt away. A doctor or dentist running the same release could reach 95% of value; nurses, midwives and allied health professionals, 90%.
Based on typical scenarios. Individual outcomes vary.
The order matters. Pick the target and price the 1 July 2027 tax treatment into it. Confirm the release and your serviceability across lenders, not on one bank's calculator. Then structure the splits so the ATO reads them cleanly. The purchase side is mapped in our step-by-step guide to buying your first investment property, and the loan side is what an investment loan structured through Wity is built to carry.
Want the release modelled on your actual numbers? Start the Wity questionnaire → and we'll walk you through your options. Free, and you'll leave with your usable-equity figure either way.