Understanding leverage: a beginner’s guide

Leverage is borrowing money, like a mortgage, to invest in an asset such as property. It can significantly magnify your returns; a small increase in a property's value can result in a much larger percentage gain on your initial deposit.

However, leverage is a double-edged sword as it also magnifies losses to the same extent. This risk underscores the importance of investing for the long-term and understanding that gains or losses are only unrealised until you sell.