Cross Collateralising involves using more than one property for one loan. In the past I have said never cross - but you should never say never as I have just come across a situation in which it may be justified. Husband and wife team planned ahead with loan structuring, but made one mistake. Properties purchased in sole names and the plan was the buy in the wife's name until she maxed out (could no longer borrow due to servicing limits). This went well and approx 8 properties were acquired over 3 to 4 years. The mistake was not accessing equity before going on maternity leave and then leave without pay. Now the husband is ready to purchase, but all their money is tied up in the wife's properties. But because she is not working she cannot borrow. I see 2 possible solutions. 1. Husband use wife's property to set up a LOC. This will mean wife needs to go on the loan or guarantee the loan. or 2. Husband buys in his name and uses wife's property as security - ie. the new property and one of wife's property as security. That is cross collateralise. Option 1 is a bit messy as due to servicing restrictions they may not service if the wife's current debts are taken into account, which is what would happen. Option 2 may be more simpler because the wife's income is not needed and once the husband's new property increases in value the wife's property can be removed as security for the husband's loan.