In Australia, the amount of equity you can use as a deposit will depend on several factors, including the lending policies of financial institutions, your financial profile, and the specific loan product you are applying for. Generally, lenders in Australia require a minimum deposit of 20% of the property’s purchase price to avoid paying lender’s mortgage insurance (LMI), which is typically required for loans with a higher loan-to-value ratio (LVR).
However, there are some lenders who may accept a deposit of less than 20% and may allow you to use equity from an existing property as part of your deposit. These types of loans are commonly referred to as “equity loans” or “equity release loans.” The maximum amount of equity you can use as a deposit will depend on the individual lender’s policies, but it is usually subject to a maximum LVR, which can vary between lenders.
It’s important to note that using equity from an existing property as a deposit may still require you to meet other eligibility criteria, such as income verification, creditworthiness, and loan serviceability assessments.
To determine the specific amount of equity you can use as a deposit and explore your options, it is recommended to consult with lenders or mortgage brokers who can provide personalized advice based on your financial situation and the property you intend to purchase.