Putting your equity to work.
The equity in your existing property is dead capital until you deliberately put it to work. A clean equity release unlocks the next deposit without touching your savings — and without contaminating your deductibility.
The deductibility test you can't ignore.
When you release equity, the interest on the released portion is deductible only if the money is used for an income-producing purpose. Use it to buy an investment property, and it's deductible. Use it to renovate your own home or pay for a holiday, and it's not. Mix the two in the same loan account, and you've contaminated deductibility — which is painful, messy, and sometimes irrecoverable without a full restructure.
The clean way to handle this is a separate split for the released equity, kept in a distinct loan account, with a clear and documented purpose. The moment funds leave that account they should go directly to the investment purpose. Don't park it in savings in between. Don't use it for personal spend with the intention of 'topping up' later. Structure it once, structure it properly, and you keep full deductibility.
Equity release FAQs
How much equity can I release?
Does my existing loan stay the same?
Can I release equity before I know what I'll use it for?
Related pages
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