Equity is the difference between the value of your home and the outstanding balance on your home loan. Using the equity in your home, whether to invest in a new property or make improvements to your existing one, is a popular wealth creation strategy for homeowners.

If you have a significant amount of equity in your home, it can open up a number of doors to use these funds. Many homeowners use equity for:

Home renovations - Many people withdraw equity for renovation because they want to add value to their property or need to renovate to accommodate changing life circumstances.

Purchasing another property - Using equity to fund the purchase of a second property is one of the best-known uses of equity. Saving for a house deposit can take years, but if you have equity used as a deposit, you may be able to buy a second property sooner.

The equity from your home or investment property can be used as a deposit on a second property, while your current property becomes a security on the new debt. This allows you to buy a second property with no cash deposit. Keep in mind that you'll need more than the deposit - stamp duty and legal fees will have to be factored in. Calculate your stamp duty here.