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Investment Loans

Planning your investment loan is
as important as getting the right property.

Let us guide you.

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Investment Loans

Planning your investment loan is as important as getting the right property.

Let us guide you.

Compare Investment Home Loans

Investing in the property market is a great way to build long term wealth. If you already own property, with the recent increases in property values in most areas there is a fair chance you may be able to invest without putting any of your own cash into the new Investment property purchase. This will depend on the value of your property and the current debt; however, investing is as easy as it has ever been.

How does an Investment Loan differ from an Owner-Occupied Home Loan?

The background on Investment Loans

It wasn’t that long ago that the Investment Home Loan and Owner-Occupied Home Loan interest rate were exactly the same. Changes in late 2015 by APRA (Australian Prudential Lending Authority) placed limitations on how many Investment Home Loans and how many Interest Only Home Loans could be written by each lender which ultimately required lenders to charge a slightly higher interest rate as well as being slightly more restrictive on how much you can borrow on an investment property. The same applies for Interest Only Home Loans.

What options are available to you?

The Home Loan Comparison Co. can do an Investment Loan comparison to show you the various options you have from different lenders.

It is important to remember that because your current lender has a great Owner-Occupied Home Loan rate for example, it doesn’t mean their Investment Home Loan rate will be a good fit for you. Some lenders are purely focused on Owner-Occupied Home Loans and don't offer an attractive Investment product for that reason.

If you are using a cash deposit to purchase your investment property, you may require more cash than if you were buying the property for owner occupation. Wanting an Interest Only Investment Home Loan may mean an even larger deposit or equity required.

Common Investment Loan Questions

  • What are the up-front costs, for both the purchase and loan costs from the bank?
  • What will the on-going repayments be?
  • What type of property will be best for investing in?
  • Will I need a deposit, or do I have enough equity in my current property?
  • How much can I afford to borrow and still live my current lifestyle?
  • How much will the lenders allow me to borrow?
  • What type of loan suits my needs best?

Minimise Taxable Income

An investment property may also be a great way to minimise your taxable income while you grow your wealth. If you incur a cost on your investment property, you are generally able to use that cost as a tax deduction. Some items that may qualify are;

  • Interest on the investment Home Loan
  • Council and Water Rates
  • Real Estate Agent management fees
  • Investment property insurances
  • Maintenance and repairs
  • Decline in value of assets in the investment property
  • If constructing, you may be able to claim depreciation of “capital works”

Things to consider when buying an Investment Property

The number one rule is always, take your time! Don’t be rushed into any purchase, especially one that will cost you several hundred thousand dollars. Get that purchase wrong and it could cost you thousands of dollars more.

Do as much research as you can on things like;

  • What have property prices been doing in the area recently?
  • How are rental properties going? Is there an over or under supply at the moment?
  • What type of property will provide the best rental return?
  • What type of property will obtain the greatest capital appreciation?
  • What are the demographics of potential renters?
  • What capital works are planned for the area? Will these improve or detract from your properties rental or growth potential?
  • What are all the commentators saying? Are we in boom or bust? Or just stable, steady as it goes?
  • What if the property was vacant for a period? Can you afford to meet the repayments with no rental income coming in?
  • Will you manage the property myself or have it professionally managed?

Without having a crystal ball, you can never be 100% sure of what the future holds, but with research and attention to detail, you can minimise your chances of error.

The Home Loan Comparison Co has worked with 100's of investors. From first time investors who are purchasing an additional property for rental income to more experienced investors with a portfolio of properties, we are able to guide you on the best finance options for your particular scenario.

Make an appointment with us to ask any pressing questions you have about your next investment loan. It's as easy as contacting us.

 

You should always consider your current cash flow and implications that the extra debt will have. You should also always seek your own independent financial, legal and tax advice as everyone’s situation is different. The information provided here is general only and has not considered your individual circumstances.

Our top 3 tips for investing in property


  1. Get the right advice. What might be the right investment for someone else may not be the right choice for you. Speak to an expert.
  2. Be pre-approved. Know your budget and what you can afford before you go looking at investment properties. Not the other way around. It is important that you buy with your head, not your heart on an investment.
  3. Know your goals. You need to have a clear idea of what will make this purchase a success in 3 years, 5 years and so on.

Compare Investment Loans

Investing in the property market is a great way to build long term wealth. If you already own property, with the recent increases in property values in most areas there is a fair chance you may be able to invest without putting any of your own cash into the new Investment property purchase. This will depend on the value of your property and the current debt; however, investing is as easy as it has ever been.

How does an Investment Loan differ from an Owner-Occupied Home Loan?

The background on Investment Loans

It wasn’t that long ago that the Investment Home Loan and Owner-Occupied Home Loan interest rate were exactly the same. Changes in late 2015 by APRA (Australian Prudential Lending Authority) placed limitations on how many Investment Home Loans and how many Interest Only Home Loans could be written by each lender which ultimately required lenders to charge a slightly higher interest rate as well as being slightly more restrictive on how much you can borrow on an investment property. The same applies for Interest Only Home Loans.

If you are using a cash deposit to purchase your investment property, you may require more cash than if you were buying the property for owner occupation. Wanting an Interest Only Investment Home Loan may mean an even larger deposit or equity required.

What options are available to you?

The Home Loan Comparison Co. can do an Investment Loan comparison to show you the various options you have from different lenders. It is important to remember here that because your current lender has a great Owner-Occupied Home Loan rate for example, it doesn’t mean their Investment Home Loan rate will be a good fit for you. Some lenders are purely focused on Owner-Occupied Home Loans and don't offer an attractive Investment product for that reason.

Common Investment Loan Questions

  • What are the up-front costs, for both the purchase and loan costs from the bank?
  • What will the on-going repayments be?
  • What type of property will be best for investing in?
  • Will I need a deposit, or do I have enough equity in my current property?
  • How much can I afford to borrow and still live my current lifestyle?
  • How much will the lenders allow me to borrow?
  • What type of loan suits my needs best?

Minimise Taxable Income

An investment property may also be a great way to minimise your taxable income while you grow your wealth. If you incur a cost on your investment property, you are generally able to use that cost as a tax deduction. Some items that may qualify are;

  • Interest on the investment Home Loan
  • Council and Water Rates
  • Real Estate Agent management fees
  • Investment property insurances
  • Maintenance and repairs
  • Decline in value of assets in the investment property
  • If constructing, you may be able to claim depreciation of “capital works”

Things to consider when buying an Investment Property

The number one rule is always, take your time! Don’t be rushed into any purchase, especially one that will cost you several hundred thousand dollars. Get that purchase wrong and it could cost you thousands of dollars more.

Do as much research as you can on things like;

  • What have property prices been doing in the area recently?
  • How are rental properties going? Is there an over or under supply at the moment?
  • What type of property will provide the best rental return?
  • What type of property will obtain the greatest capital appreciation?
  • What are the demographics of potential renters?
  • What capital works are planned for the area? Will these improve or detract from your properties rental or growth potential?
  • What are all the commentators saying? Are we in boom or bust? Or just stable, steady as it goes?
  • What if the property was vacant for a period? Can you afford to meet the repayments with no rental income coming in?
  • Will you manage the property myself or have it professionally managed?

Without having a crystal ball, you can never be 100% sure of what the future holds, but with research and attention to detail, you can minimise your chances of error.

The Home Loan Comparison Co has worked with 100's of investors. From first time investors who are purchasing an additional property for rental income to more experienced investors with a portfolio of properties, we are able to guide you on the best finance options for your particular scenario.

Make an appointment with us to ask any pressing questions you have about your next investment loan. It's as easy as contacting us or giving us a quick phone call.

 

 

You should always consider your current cash flow and implications that the extra debt will have. You should also always seek your own independent financial, legal and tax advice as everyone’s situation is different. The information provided here is general only and has not considered your individual circumstances.

Please enter your name.
Please enter a valid email.
Please enter a valid phone number.
Please enter a message.

Our top 3 tips for investing in property


  1. Get the right advice. What might be the right investment for someone else may not be the right choice for you. Speak to an expert.
  2. Be pre-approved. Know your budget and what you can afford before you go looking at investment properties. Not the other way around. It is important that you buy with your head, not your heart on an investment.
  3. Know your goals. You need to have a clear idea of what will make this purchase a success in 3 years, 5 years and so on.

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