Investment LoansMakeMyLoan brokers compare dozens of lenders and owe you a Best Interests Duty — your bank doesn't.
An investment property loan is, mechanically, the same product as the loan on your own home: a mortgage secured against a property, repaid over a term. What changes is how lenders price it, how much they will lend against the property, and how they assess whether you can afford it — because the property's income and expenses now enter the calculation alongside your own. This guide explains the differences that actually matter, so the numbers a lender comes back with make sense before you start looking at properties. Our investment loans page covers how we help on the finance side.
Lenders treat investment lending as a different risk category from owner-occupier lending, and it shows up in three places:
None of this makes investment lending harder to obtain for a well-prepared borrower — it just means the settings differ, and they differ between lenders more than most people expect.
A 20 per cent deposit plus purchase costs is the common benchmark, because at 80 per cent LVR most lenders do not require lenders mortgage insurance (LMI). Some lenders will accept smaller deposits on investment purchases with LMI added, though maximum LVRs for investment lending are often lower than the owner-occupier equivalent, and LMI premiums rise quickly as the LVR climbs. You can see how deposit size, LVR and LMI interact with our LVR and LMI calculator.
The deposit does not have to be cash. Many investors fund it from equity in a property they already own — typically by borrowing up to 80 per cent of that property's value, less the current loan. If that is your plan, our guide to using equity to buy an investment property walks through the structures and the traps.
Rental income counts towards your borrowing power, but never at face value. In general terms:
Because shading percentages and evidence rules differ by lender, the same property can add materially different amounts to your borrowing power depending on where you apply.
Free, instant, and no details required — see roughly what lenders could approve for you.
Like any regulated loan, an investment loan is assessed under responsible lending obligations: the lender tests whether you can afford the repayments with room to spare. Two features matter most for investors:
Our borrowing capacity calculator gives you a starting estimate, and our guide to how banks assess serviceability explains the machinery in detail.
As a portfolio grows, two ceilings appear that first-time investors rarely see coming. The first is the serviceability ceiling described above — shaded rents and buffered repayments eventually cap what any lender will extend. The second is exposure policy: many lenders limit their total lending to one borrower or group, and some restrict the number of properties or total exposure they will hold in a single postcode, building or property type. Investors with several properties often end up spreading loans across lenders for this reason, and the order in which you use lenders can affect how far the portfolio can go. This is genuinely a strategy question, and one where broker experience across many lender policies earns its keep.
Structure decisions are worth making deliberately rather than by default:
Investment lending rewards preparation: the right lender, the right structure and realistic numbers before you bid, not after. We can compare how different lenders would assess your income, rent and existing loans, and map out what your next purchase realistically looks like. Start an application or get in touch for a no-obligation chat.
This article is general information only and does not consider your objectives, financial situation or needs. It is not financial, credit or tax advice — speak to a qualified adviser about your circumstances.
Typically, yes. Most Australian lenders price investment loans somewhat above their owner-occupier equivalents, and interest-only repayments usually carry a further margin. The size of the gap varies by lender and changes over time, so it pays to compare current offers rather than assume the difference is fixed.
A 20 per cent deposit plus purchase costs is the common benchmark, because at 80 per cent LVR most lenders do not require LMI. Some lenders accept smaller deposits with LMI, though investment LVR caps are often stricter than owner-occupier ones. Many investors fund the deposit from equity in an existing property instead of cash.
Lenders shade rental income — commonly to around 75 to 80 per cent of gross rent — to allow for vacancies and holding costs, and they require evidence such as a lease, rental statements or a rental appraisal. The property's expenses and loan repayments are counted in full on the other side of the ledger.
Because your existing loan is assessed at a buffered rate — typically around 3 percentage points above the actual rate — while your existing rent is shaded. Each additional property adds buffered repayments and shaded income, so capacity erodes faster than the real-world cash flow suggests.
Yes, this is common. Lenders will generally let you borrow against an existing property up to around 80 per cent of its value, less the current loan, and use the released funds as the deposit and costs for the new purchase. Keeping the equity release as a separate loan, rather than cross-collateralising, is the structure many borrowers and brokers prefer.
This article is general information only and doesn't consider your personal objectives, financial situation or needs — it isn't personal credit advice, and lending criteria, rates, fees and government schemes change. Before acting, speak with a licensed MakeMyLoan broker or credit representative who will assess your circumstances and provide a credit guide before any credit assistance is given.
