Investment Loans

As with a home loan, a contribution of 20% of the property value avoids lenders mortgage insurance, while smaller deposits are workable with the insurance added. The difference is that most investors fund the deposit from equity in their home or another property rather than cash. We calculate how much usable equity you have and the cleanest way to apply it, so you can often buy without touching your savings.

Usually, yes, and it’s the most common way investors fund a purchase. The equity in your home, the difference between its value and what you owe, can be released to cover the deposit and costs on an investment property. How much you can access depends on your home’s value, your loan balance and your borrowing capacity. We work out your usable equity and structure the release so it doesn’t compromise your existing loan.

It depends on your strategy. Interest-only repayments keep your cash flow higher and preserve funds, which many investors prefer, and the interest may be deductible (your accountant can confirm). Principal-and-interest builds equity faster and usually comes with a slightly lower rate. Some investors run interest-only on investment debt while paying down their own home. We’ll talk through which fits your cash flow and goals rather than defaulting to one.

Lenders count the rent toward your serviceability, but most apply a discount, commonly assessing around 80% of the rent, to allow for vacancies, management fees and maintenance. The exact treatment varies by lender, as does how they handle negative gearing and other income. Because these differences can swing your borrowing capacity significantly, we compare lenders to find the one whose rules suit your situation best.

Generally, yes, investment loans usually carry a slightly higher rate than owner-occupier loans, and interest-only pricing is typically a little higher again than principal-and-interest. The gap varies between lenders and over time. Because the differences aren’t uniform across the market, comparing lenders matters more for investment loans than most borrowers expect, which is a core part of what we do.

Investment property has tax implications, including the potential to deduct loan interest and other costs, and concepts like negative gearing where the property’s costs exceed its income. These can affect your overall position meaningfully, but the specifics depend on your circumstances and current tax law. We’re not tax advisers, so we coordinate with your accountant to make sure the loan structure and ownership line up with the tax strategy they recommend.

Cross-collateralisation ties multiple properties together as security for your loans. It can be simpler in some cases, but it reduces flexibility: selling or refinancing one property can disturb the others, and it can make it harder to move lenders. We generally favour standalone structures that keep your properties and options separate, though the right approach depends on your situation. We’ll explain the trade-offs before anything is set up.

There’s no fixed limit, but as your portfolio grows, serviceability rather than deposit usually becomes the constraint, because lenders assess all your loans at a buffer rate. The way your existing loans are structured has a big effect on how far you can keep going. We model your whole position and structure each purchase to preserve your capacity, so the portfolio can keep growing rather than stalling at the next application.