The short answer is yes – many property investors use the equity in their current home to get a loan for their next property, which is called usable equity. But it all depends on your circumstances. If you decide to use usable equity for a new loan, then ideally, the new loan should have a Loan to Value Ratio (LVR) of 80 per cent or less. This is because if you borrow anything above 80 per cent, you will have to pay Lenders Mortgage Insurance (LMI). Here's an example of how this all works. Say you have a home worth $600,000, but you still owe $300,000 on your home loan. This means you have a current LVR of 50 per cent. You can borrow up to $180,000 (which is the difference between your current loan balance and max usable equity to remain under 80% LVR) to put towards your next investment property without paying LMI, as your new LVR is still under 80 per cent. Now that’s smart.