Turning home equity into a second property

Mortgage broker Lindsay Brascia of Mortgage Solutions shared this real client story with us — a strategy many homeowners don't realize is possible: using equity from your current home to purchase another property — with minimum down payment — without selling.

These homeowners owned a townhouse valued at approximately $1.3M with an outstanding mortgage balance of $700,000. They wanted to purchase an investment property but didn't want to sell their home or wait years to save a down payment.

By refinancing their existing townhome, they accessed a portion of their equity and used those funds toward a second property. We structured the new purchase as a "second home," which allowed them to qualify for minimum down payment. That property was later converted into a rental with a great tenant.

The numbers

What did this cost?

These clients were at the end of their 3-year term, so there was no penalty to renegotiate. Here's what came out of the refinance proceeds:

Even with those costs, the strategy made sense — it let them move forward now rather than waiting on savings, while continuing to build long-term real estate wealth. No cash out of pocket.

Many homeowners assume buying another property requires a large amount of cash or selling their home first. In reality, equity can be a powerful planning tool when the numbers are structured the right way — whether for a rental property, a future downsizing plan, or growing your portfolio.