Investment property finance is more complex than owner-occupier lending. Loan structure, interest-only periods, offset accounts and rental income treatment all affect your outcome significantly.
Investment finance is structured very differently to owner-occupier loans. Interest-only on the investment portion improves cash flow and maximises tax-deductible interest (ATO), while offset accounts concentrate savings against non-deductible owner-occupier debt first. Rental income is typically assessed at 70–80% to buffer vacancy and expenses. Ownership name (individual, trust, SMSF) materially affects land tax, CGT and future borrowing capacity — the wrong structure costs tens of thousands across a portfolio. A depreciation schedule ($600–$800 one-off) usually unlocks $3K–$8K/yr in deductions.
The structure of your investment loan affects your tax position, borrowing capacity for future purchases, and overall return. Getting specialist advice before you buy — not after — is one of the most important things an investor can do. A specialist will work with your accountant to get the structure right from the start.
With interest-only, you pay only the interest each month — your loan balance stays the same. With principal and interest, you pay both — your balance reduces over time. Interest-only has lower repayments but you build no equity through repayments.
Yes — if you have sufficient equity in your existing property, you can use it as security for an investment loan without needing a cash deposit. The lender assesses the combined LVR across both properties.
Most lenders accept 70–80% of your expected gross rental income. Some specialist lenders use higher percentages for experienced investors with strong rental histories. Your specialist will find the lender with the most favourable rental income policy for your situation.
Negative gearing reduces your taxable income by the amount of your net rental loss. Whether it makes overall financial sense depends on your tax rate, the property's capital growth prospects, and your cash flow position. Always discuss with your accountant.
Most lenders require at least 10% deposit for investment properties, plus costs. If you have equity in an existing property, this can substitute for a cash deposit. Some lenders will lend 90% for investment with LMI, though this becomes more restrictive for investment properties.
Everything above is general information. When you’re ready to act on your situation, a vetted home loan specialist comparing 30–60 lenders will model your exact numbers — free to you, no cost and no obligation.
Get Matched With A Specialist →