Understanding leverage: a beginner’s guide

This guide explains leverage—borrowing money to invest, most commonly through a mortgage when buying property. It's a powerful tool that magnifies your financial outcomes.

When property values rise, leverage can significantly boost the return on your initial deposit. Conversely, it also amplifies losses if values fall, posing a greater risk to your equity.

It's crucial to remember these are unrealised gains or losses until you sell. Increased equity can also be leveraged for renovations or other investments.