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Many Zimbabwean homeowners are sitting on untapped wealth home equity which can be used to fund the purchase of an investment property. One effective way to unlock this value is through a mortgage product called Equity Release, offered by several local banks and building societies.
What Is Equity Release?
Equity Release is a facility that allows you to access funds tied up in your fully paid-for home without having to sell it.You can borrow up to 50% of your property’s value. Funds can be used for any legal purpose, including purchasing:
- A flat
- A cluster home
- Other rental investment properties
Loan periods typically stretch up to 15 years. The property must be privately owned and titled
How It Works
- Your existing, unencumbered property acts as collateral.
- The bank will assess its market value and approve a loan up to 50% of that value.
- Once approved, you can use the funds to buy income-generating assets like a rental unit or apartment block.
This means your home becomes the key to building wealth without the need to sell it.
Building Up Equity
To benefit from equity release in the future, start by increasing your equity now:
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Reduce existing mortgage debt – the more of your loan you’ve paid off, the more equity you build.
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Improve property value – renovations or upgrades can increase market valuation, giving you access to more funds.
Things to Consider Before Applying
Even with substantial equity, approval is not automatic. Lenders will assess:
- Your income and ability to repay
- Age and retirement horizon
- Number of dependents
- Other existing debts
- Purpose of the funds
Why Use Equity Release for Investment Property?
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It creates passive income through rent.
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Offers capital growth potential as the investment appreciates.
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Helps you diversify your property portfolio with smaller units that are in demand.
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Avoids the need to liquidate your primary residence.
Final Word
Equity release is a smart financial tool for homeowners who want to scale their investments. If you’ve paid off your mortgage and own property with title deeds, it’s worth consulting your bank to explore this underutilized opportunity.
Use your home to unlock more than comfort—use it to unlock wealth.
