Compare Investment Property Home Loan Rates

Investing in property? Thousands of Australians have used finder to find a competitive loan to lower your costs and boost your portfolio.

Every property investor wants to maximise their return while minimising costs. This means finding a competitive investment property loan with a good rate and useful features. It also means having a strategy in place. Read on to learn more about property investment or start comparing loans in the table below.

loans.com.au Package Special offer

loans.com.au Package Special - 2 Year Fixed (Investor, IO)

3.89 % p.a.

fixed rate

4.24 % p.a.

comparison rate

loans.com.au Package Special offer

The loans.com.au Package Special - 2 Year Fixed (Investor, IO) is a sharp fixed interest rate for investors who need an interest-only option. Lock in you rate for 2 years and kickstart your property portfolio.

  • Interest rate of 3.89% p.a.
  • Comparison rate of 4.24% p.a.
  • Application fee of $0
  • Maximum LVR: 80%
  • Minimum borrowing: $50,000
  • Max borrowing: $1,000,000
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How do I compare investment property loans?

When comparing investment loans you need to look closely at the following factors:

  • Rates. Rates have a big influence on your repayment size, so be sure to compare loans and find one with the right rates, in addition to features and minimal fees. Also compare fixed and variable rates to find one which will suit you.
  • Eligibility. Make sure the loan fits your investment strategy. Not every home loan will be available for commercial property, for example, and some loans will have limits on square meterage. Others will not be available for certain property types, such as inner city apartments.
  • Investor benefits. If you’re investing you might want to ensure your home loan has features which can maximise tax benefits or maximise cash flow. This includes interest-only options, interest in advance options, and 100% offset accounts.
  • Fees. Fees aren’t necessarily a sign of a bad loan, as long as what you’re paying for will save you money or reduce your loan costs over the life of your loan. If your loan has an annual fee for example, it may come with flexible terms which allow you to use it as you want to. Compare not only application, valuation and legal fees but also ongoing fees for features such as offset accounts and redraw facilities, and monthly fees.
  • Features. This depends on how you plan to use your loan. If you plan to put extra funds towards your home loan, ensure that your lender won’t penalise you. If you want to get access to these extra funds, seek one with a redraw facility.

Use our repayment calculator to get a better idea of your repayment costs.

How do investor loans differ from typical home loans?

Lenders see mortgages for investment as a higher risk than regular owner occupier home loans. Home loans for investment often have stricter lending requirements and borrowing limits, plus higher interest rates. They may also have a higher LVR, requiring the borrower to save up a larger deposit. Read more about how these loans differ from owner-occupier loans.

What types of loans are available for investors?

The table above contains a wide range of variable and fixed rate investor mortgages, but there are also more specialised loans that might be useful for different types of investors. You can read more about these products on the following pages:

Using the equity in your home to fund an investment

If you already own property you can use the equity in that property as a deposit on an investment loan. This means you don't need to save up a deposit, although you will need to pay back the deposit loan and the money you've borrowed to buy the property.

Calculating the equity in your property
  • Your home is valued at $750,000
  • You owe $200,000 on the property
  • Your equity = $550,000

How can I make sure I'm eligible for investor finance?

Your lender needs to be confident that you can repay your investor mortgage. To maximise your chances of success, be sure to save a good-sized deposit, prepare clear evidence of your income and check your credit score for outstanding debts and liabilities. Get those under control before applying for a loan.

The property you buy also affects your application. Some lenders are reluctant to fund purchases of risky properties, such as very small apartments in suburbs they judge to be oversupplied. You may need to approach a different lender or come up with a bigger deposit.

What strategies can I use to make a profit on my property?

Savvy investors can look at multiple property strategies to maximise their wealth creation. These include:

  • Negative Gearing. If the expenses on an investment property are greater than the income it generates you're making a loss. In Australia this loss can be used as a tax deduction, which is called negative gearing. It's a good strategy to cover early losses while waiting for your property's capital gain to grow. Learn more about negative gearing.
  • Buy and Hold. The simplest strategy. You purchase a property and hold it with the expectation that the property will grow in value over time. This strategy can be combined with negative gearing.
  • Renovate. Buy a property in need of work, renovate it into a far better property and you'll raise the property's value. This requires a lot of hard work and money but with the right property, the right renovations and the right market it can be a great strategy. Check out our renovations guides for more information.
  • Passive property development. Most people won't undertake a major property development themselves. But passive property development allows you to stump up the cash to someone else who develops it for you. It's easier than going into property development yourself, but it's not without risks.

Watch: Investment strategies explained in under 3 minutes

 

Check out our property investment hub to learn more about investing in property

Weighing up the benefits and the risks

As with any investment, choosing to invest in property carries both benefits and risks. It's important you weigh up the pros and cons of starting a property portfolio before you decide if the strategy is right for you.

Benefits

  • Rental income. An investment property can increase your cash flow by providing you with a second income source through rental income. A well-located property could provide 3-5.5% rental yield.
  • Capital gain. When it comes time to sell your property, you may benefit from making a capital gain if the value of your property has risen.
  • Tax and depreciation benefits. If you have a knowledgeable accountant and quantity surveyor, there’s plenty of room to take advantage of certain tax advantages, including negative gearing.
  • Control. Unlike other asset classes such as shares, many aspects of your property investment can be controlled. You can carry out value-adding activities on your property such as renovations, refinance your home loan if you find a better rate or turn your property into a boarding house.

Risks

  • Costs. Buying a property can be costly. There are also many other upfront costs you may have to pay, including lenders mortgage insurance (LMI), stamp duty, building and pest inspections, conveyancing and legal charges. As the owner of the property, you'll also be responsible for covering ongoing costs such as repairs and maintenance.
  • Selling a property takes time. Selling property can take a while. This means if you might need your investment cash on short notice, then property might not be for you.
  • Untenanted periods. If you rely on rental income to help pay off your property investment, you face the risk of untenanted periods which means that you may suffer financially. This is why it's important to ensure you have a cash buffer.

Frequently asked questions about investment property loans

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UBank UHomeLoan Variable Rate - Discount offer for Owner Occupiers, P&I Borrowing over $200,000

Take advantage of a low-fee mortgage with a special interest rate of just 3.59% p.a. and a 3.59% p.a. comparison rate.

loans.com.au Essentials - Variable (Owner Occupier, P&I)

A competitive interest rate home loan with interest only options. Interest rate 3.64% p.a.
comp rate of 3.66% p.a.

Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed LVR ≤90% ($150K+ Owner Occupier)

Loans over $150k get a discount off an already low fixed rate. Available for NSW, QLD and ACT residents only.

Newcastle Permanent Building Society Premium Plus Package Home Loan - New Customer Offer ($150k+ Owner Occupier, P&I) Discount 1

New borrowers or refinancers from another lender get a discounted rate with this package loan.

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27 Responses

  1. finder Customer Care
    ArnoldOctober 31, 2017Staff

    Hi Debra,

    Thanks for your inquiry

    If you’re looking for other Investment Property Loans, you may check them on this page. But before you pick one out, please spare time to read this guide on Investment Loan Interests

    Regarding the fees, you may check your loan agreement to see if your lender charges a discharge fee.

    Hope this information helps

    Cheers,
    Arnold

  2. Default Gravatar
    SonjaAugust 9, 2016

    Hi

    I applied for an owner/occupier home loan with a bank but they were unable to offer me the amount I wanted. I was advised by them that I could instead apply for a loan as an investor which would obtain me a higher loan amount as they would factor in potential rental income – and then after obtaining the loan, advising them I’d ‘changed my mind’ and wished to live in the property and switch to the occupier home loan instead.

    This seems kind of ‘dodgy’ to me – is it legal? Are there any ramifications to doing this, eg is stamp duty and taxes higher on investment properties than on owner/occupied?

    thanks a lot

    Sonja

    • finder Customer Care
      MayAugust 10, 2016Staff

      Hi Sonja,

      Thank you for your inquiry and for contacting finder.com.au we are a financial comparison website and general information service we are not mortgage specialists so can only offer general advice.

      Different lenders/banks actually have their own set of eligibility criteria, for instance, for a home loan product. But most likely, when deciding on how much you can borrow, they use important criteria such as your income, outstanding debt level and credit history.

      For instance, the bank you have spoken with may have found that you can get a better offer on their investment home loan than that of the occupier home loan product. But, generally, occupier home loans carry a lower interest rate than loans offered to investors. You can find more information about occupier home loan on this page and how this differ to an investment home loan.

      Whilst it’s good that you have prepared yourself and determined how much you will borrow, it is also important to take into account the eligibility criteria offered by most lenders. This way, you will have a fairly good idea of whether or not you’ll be approved for a certain loan. Alternatively, you can also get a professional advice from a mortgage broker who can give you home loan options available for your specific situation.

      Furthermore, you may like to read our guide about know how much you can borrow on a mortgage, which you might find useful as well.

      I hope this can help.

      Cheers,
      May

  3. Default Gravatar
    KarenMarch 8, 2016

    We are building a house on land that we own. We may rent we may choose to live in the house. Are we able to take out a home loan even if we choose to rent the property once built?

    • finder Customer Care
      BelindaMarch 10, 2016Staff

      Hi Karen,

      Thanks for reaching out.

      At the time of applying for a home loan, you’ll need to have a fairly clear idea of whether the loan is for owner-occupier or investment purposes. This is because the structure of the loan will be catered to the loan purpose and your needs. For instance, if you initially took out an owner-occupier line of credit home loan but then later decided to turn the property into an investment, you would not benefit from tax incentives from this kind of structure.

      However, circumstances do change. Your best course of action would be to speak to a licensed mortgage broker regarding your borrowing options and the best type of loan for your purchase.

      Thanks,
      Belinda

  4. Default Gravatar
    DebJanuary 20, 2016

    Am I eligible to apply for an ‘investment loan” if just buying a vacant block of land?

    • finder Customer Care
      BelindaJanuary 21, 2016Staff

      Hi Deb,

      Thanks for reaching out.

      This will depend on the lender’s eligibility criteria for the home loan. Above on this page you can compare a range of home loans that are suited for investment purposes and you can fill out the form to speak to a mortgage broker to discuss your borrowing options.

      Alternatively, you learn more about vacant land home loans here and compare construction home loans on this page.

      Due to the conservative approach that lenders take towards vacant land home loans, many offer a lower maximum loan-to-value (LVR) ratio and as a result you may need to save a larger deposit.

      Kind regards,
      Belinda

  5. Default Gravatar
    craigNovember 25, 2015

    Are your investment loan rates applicable to a self managed super fund?

    • finder Customer Care
      MarcNovember 25, 2015Staff

      Hi Craig,
      thanks for the question.

      Investment home loan rates generally do not apply to SMSF lending. For SMSF home loans, check out our guide and comparison table here.

      I hope this helps,
      Marc.

  6. Default Gravatar
    HelenAugust 20, 2015

    what is LVR?

    • finder Customer Care
      BelindaAugust 20, 2015Staff

      Hi Helen,

      Thanks for your enquiry.

      The loan-to-value (LVR) ratio refers to the size of a loan in relation to the value of a property, expressed as a percentage.

      For instance, if you’re looking to purchase a property for $500,000 and you need a loan of $400,000 to purchase it, then your LVR would be 80%.

      You can read about how to calculate the LVR for your loan on this page.

      I hope this clarifies things for you.

      Thanks,
      Belinda

  7. Default Gravatar
    IdaAugust 12, 2015

    Hello Belinda
    I am looking to refinance my investment loan, I am renting out a factory. Could you help me please.

    • finder Customer Care
      BelindaAugust 13, 2015Staff

      Hi Ida,

      Thanks for your enquiry.

      finder.com.au is an online comparison service so we can’t offer personalised advice about how to refinance your investment loan, but rather we can offer general information to help you make a more informed decision.

      On this page and this page you can read our property investment guide and learn about the process involved when refinancing. You can also compare a range of home loans that are suited for investment purposes.

      Please be mindful of any switching or exit fees you may be charged by your existing lender as well as the application fees charged by your new lender. You can use our refinancing calculator here to weigh up the costs involved.

      Thanks,
      Belinda

  8. Default Gravatar
    JacksonJune 26, 2015

    Hi.
    My question is in regards to LMI when accessing equity.
    let say I bought A property with an LVR of 95% and paid LMI. If I access some equity or refinance whilst keeping the new LVR at 95% would I have to pay LMI again? if so would it be the full amount or just the difference? and how ould this be calculated. I dont want to wait untill I have enough equity to take some money and have a remaining LVR of 80%.

    Thanks

    • Default Gravatar
      JodieJune 26, 2015

      Hi Jackson,

      Thank you for contacting finder.com.au, a financial comparison website.

      LMI is due in full on any loan that goes above 80% LVR no matter if it is a new loan or refinancing from an old loan and it calculated on based on the specifics of the loan.

      Your property price may have gone up so you may be able to refinance without incurring LMI, you may be eligible for a rebate from your current LMI policy all you have to do is discuss this with the provider of your LMI.

      If you are looking to refinance in order to purchase an investment property we have a page that gives great tips on refinancing for investments.

      Regards
      Jodie

  9. Default Gravatar
    Mandy20June 19, 2015

    Hi
    My husband and are both looking for a rural property in Victoria we would like to build within 3years so who is the best lender and does it matter if we have other debts (only4)
    Thanks

    • finder Customer Care
      BelindaJune 22, 2015Staff

      Hi Mandy,

      Thanks for your enquiry.

      Please note that finder.com.au is an online comparison website so we’re not in a position to recommend specific lenders or products.

      However, on this page you can read more about construction loans and fill out the form to speak with a mortgage broker to discuss your options.

      Kind regards,
      Belinda

  10. Default Gravatar
    PeterSeptember 3, 2014

    Hi. Who lends on commercial/industrial property? Am after wharehousing and office space for my own company, and the for sale offerings are pretty good relative to rental rates.

    • finder Customer Care
      ShirleySeptember 5, 2014Staff

      Hi Peter,

      Thanks for your question.

      Unfortunately at this current in point we don’t compare commercial loans. If you’d like, you can get in touch with a commercial mortgage broker, who can help you find the best commercial loan for your situation.

      We also have a business banking section on the site that may be helpful.

      Cheers,
      Shirley

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