Introduction
Do you have a low mortgage interest rate that you locked in years ago—but now you’re itching to invest in real estate?
Good news: you might not need to touch that low-interest mortgage at all.
In this post, I’ll show you a smart way to use the equity in your home to buy another property—without refinancing. This strategy is especially useful for homeowners in the U.S. who have paid 40% or more of the home.
What Is Home Equity and How Can You Use It?
Let’s start with: What is equity?
Equity is the difference between how much your home is worth today and what you still owe on your mortgage.
For example, if your home is worth $500,000 and you owe $300,000, you have $200,000 in equity.
How do you those $200,000 that into cash?
There are a few options:
- Cash-out Refinance: You can refinance your mortgage to pull cash—but if you have a low interest rate compared to today’s rates, there’s no need to consider this one today.
- Second Mortgage: A separate loan with fixed payments.
- HELOC (Home Equity Line of Credit): A HELOC is flexible line of credit secured by your home. You typically get approved for a maximum amount, and you can borrow some or all of it, then you repay it over 5, 10 or even 30 years. HELOCs make a lot of sense now because you’re not getting new loan or a new rate for your mortgage.
All three options allow you to tap into your equity—without selling your house. But if you want speed, flexibility, and low upfront costs, a HELOC is usually the better choice.
Want to know how much equity you could access in just 5 minutes—with no impact to your credit?
We recommend checking out Figure.
They offer a super simple 5-minute HELOC pre-qualification with no credit check—and if you move forward, you could get your cash within just 5 days.
→ See How Much Equity You Can Access with Figure
Strategy: How to Tap Into Your Equity Without Touching Your Mortgage
The key is to not refinance.
Instead, you can use a HELOC or a second mortgage to pull cash from your equity, keeping your original mortgage—and its low rate—intact.
Then, use the cash as down payment on an investment property.
Step-by-step guide
- Calculate your available equity: Use sites like Zillow to get an estimated value of your property, or hire an appraiser for an accurate value.
- Explore loan options: Talk to lenders like Figure to See How Much Equity You Can Access. Takes less than 5-min and it does not impact your credit score.
- Get pre-approved: Most lenders can give you a pre-approval in 1–3 days to know how much you can actually get in cash-out.
- Choose your investment property strategy: Do you want to use the funds to buy a rental property for long-term rentals? Airbnb? Or maybe a duplex or four-plex? Most American home-owners with $200,000 in equity could buy a small building – and they don’t even know it.
- Use rental income to pay the loan: If you’re buying a rental, make sure the cashflow can cover the mortgage of the new real estate and the loan from your cash-out. 90% of the times it pencils out and you may even have additional cashflow.
Why This Strategy Works
- You keep your original low-interest mortgage.
- Access cash without selling your home.
- Great for scaling your real estate investments.
This strategy allows you to build wealth through real estate while keeping your biggest financial win—your low mortgage rate—untouched.
Final Thoughts
Using your home equity can be a powerful move if you want to invest in real estate—without giving up your killer interest rate.
If you’re ready to find out how much equity you can use, or want help finding investment deals, contact us to help you.
Want to see real examples of homeowners investing with their equity?