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Investment home loan rates

Investing in property? Cut back on your costs by comparing 20+ home loans

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1 - 16 of 26
Name Interest Rate p.a. Comparison Rate p.a. Fees Monthly Payment
Principal & Interest40% min. depositInvestment
Interest Rate
6.19%
Comparison Rate
6.19%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$3,369
Go to siteMore Info
Principal & Interest20% min. depositInvestment
Interest Rate
6.45%
Comparison Rate
6.48%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$3,462
Go to siteMore Info
Principal & Interest40% min. depositInvestment
Interest Rate
6.34%
Comparison Rate
6.36%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$3,422
Go to siteMore Info
Principal & Interest20% min. depositInvestmentOffset account
Interest Rate
6.19%
Comparison Rate
6.23%
Fees
Application: $595
Ongoing: $0 p.a.
Monthly Payment
$3,369
Go to siteMore Info
$3,000 refinance cashback offer
Eligible refinancers who apply online and borrow $250K+ (LVR 80% or lower) can get a $3,000 cashback. Terms and conditions apply.
Principal & Interest20% min. depositInvestmentOffset account
Interest Rate
6.45%
Comparison Rate
6.70%
Fees
Application: $0
Ongoing: $248 p.a.
Monthly Payment
$3,462
Go to siteMore Info
Principal & Interest40% min. depositInvestmentOffset account
Interest Rate
6.34%
Comparison Rate
6.59%
Fees
Application: $0
Ongoing: $248 p.a.
Monthly Payment
$3,422
Go to siteMore Info
Principal & Interest30% min. depositInvestmentOffset account
Interest Rate
6.34%
Comparison Rate
6.59%
Fees
Application: $0
Ongoing: $248 p.a.
Monthly Payment
$3,422
Go to siteMore Info
Principal & Interest 3Y Fixed20% min. depositInvestment
Interest Rate
6.39%
Comparison Rate
6.46%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$3,440
Go to siteMore Info
Interest only20% min. depositInvestment
Interest Rate
7.34%
Comparison Rate
7.66%
Fees
Application: $0
Ongoing: $0 per month
Monthly Payment
$3,789
More Info
Interest only 2Y Fixed10% min. depositInvestment
Interest Rate
6.79%
Comparison Rate
7.78%
Fees
Application: $0
Ongoing: $10 per month
Monthly Payment
$3,585
More Info
Interest only 3Y Fixed20% min. depositInvestmentOffset account
Interest Rate
6.64%
Comparison Rate
6.63%
Fees
Application: $498
Ongoing: $0 p.a.
Monthly Payment
$3,531
More Info
Principal & Interest 4Y Fixed5% min. depositInvestment
Interest Rate
6.59%
Comparison Rate
6.49%
Fees
Application: $499
Ongoing: $0 p.a.
Monthly Payment
$3,513
More Info
Principal & Interest 3Y Fixed20% min. depositInvestment
Interest Rate
6.69%
Comparison Rate
7.50%
Fees
Application: $0
Ongoing: $10 p.a.
Monthly Payment
$3,549
More Info
Principal & Interest 2Y Fixed30% min. depositInvestment
Interest Rate
6.49%
Comparison Rate
7.99%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$3,476
More Info
Principal & Interest 3Y Fixed20% min. depositInvestment
Interest Rate
6.19%
Comparison Rate
6.96%
Fees
Application: $0
Ongoing: $395 p.a.
Monthly Payment
$3,369
More Info
Principal & Interest 4Y Fixed20% min. depositInvestment
Interest Rate
6.79%
Comparison Rate
7.90%
Fees
Application: $0
Ongoing: $395 p.a.
Monthly Payment
$3,585
More Info
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Showing 16 of 26 results

How do I compare investment loans?

Property investors should consider the following when finding the ideal mortgage:

  • Interest rate: A lower interest rate can mean lower repayments on your loan.
  • Fees: Take a look at fees that might come with the loan. Avoiding fees can make your loan cheaper.
  • Loan features: Mortgage features like an offset account can help you build up savings while reducing your interest charges. Offset accounts can be very helpful for investors planning to convert their home into an investment later.
  • LVR: Loan to value ratio (LVR) is the amount you can borrow relative to the value of your investment property. If you have a smaller deposit, compare which lenders allow high LVRs. But remember, the smaller your deposit, the more you have to borrow and the higher your costs will be.
  • Borrowing capacity: Every lender has different lending criteria. Compare lenders to get an estimate of your borrowing power before deciding on a particular loan or lender.
Matt Corke

My mortgage broker suggested I go on an interest only investment property loan as it would keep down the costs, and the interest can be claimed at tax time.
— Matt Corke, Head of Publishing Ventures

What are investment loans?

An investment loan is a mortgage investors use to buy investment properties. Investment loans have higher interest rates than owner-occupier loans because lenders view investors as riskier borrowers.

Investment loans: Basic facts

Rate

Fixed or variable rates

Investors can choose fixed or variable repayments. Variable rate loans are easier to pay off faster or refinance without an exit fee and are currently lower than fixed rate loans.

But a fixed rate loan lets you lock in an interest rate and forget about rates rising. There's also the option of splitting your loan into fixed and variable portions.

Thinking

Interest-only repayments

Most owner-occupier borrowers choose principal-and-interest repayments. You borrow money and pay it back, plus interest. Investors can do this too. But they have another option.

Interest-only investment loans start with very low repayments because you're just paying the interest charges. These loans cost you more in the long run. But they let investors maximise their tax-deductible debts in the short term.

House

Tax deductions

As an investor, most expenses related to owning and maintaining your investment property are tax-deductible.

This includes your loan fees and your loan interest charges. If your investment costs you more than it generates in rent, you can offset the cost by reducing your tax bill.

Your interest rate update: February 2024

On 06 February the official cash rate held at:

4.35%

The lowest investor loan in Finder's database is:

6.19%

With this rate, assuming the average investor home loan size of $579,633 you would be making monthly repayments of:

$3,548

The lowest investment loan rates are Newcastle Permanent's Real Deal Home Loan, Greater Bank's Great Rate Home Loan and ME's Flexible Home Loan Fixed

Cash rate remains the same but when will rates fall?

The Reserve Bank of Australia (RBA) has kicked off its 2024 cash rate decisions with a hold to the national rate at 4.35%.

The cash rate had been rising over 2022 and 2023 in a bid to slow down inflation which was rising above the RBA’s target.

And it worked! Inflation is slowing. The latest figures show the Consumer Price Index (the way the rate of inflation is measured) is about 3% lower than it was during the peak.

But it’s still higher than the RBA’s target. Until the CPI rate drops below 3% it’s unlikely we’ll see rates start falling. The RBA predicts the CPI will fall below 3% in 2025, but the latest figures were ahead of predictions.

Although commentary has turned towards when the RBA will start cutting the cash rate, governor Michelle Bullock said in the latest cash rate announcement that “a further increase in interest rates cannot be ruled out”.

The good news for borrowers is that banks are starting to respond with their own rate cuts. While most rate cuts have been to fixed rates, Macquarie Bank recently cut its variable rates.

Graham Cooke

Graham Cooke heads up Finder's insights team, which is responsible for conducting data-driven research. He also regularly appears on TV and radio. He has taken part in more than 500 interviews to discuss financial news and trends.

How do I apply for an investment property loan?

Lenders treat investment properties as higher-risk purchases, which means it can be more complicated to get an investment loan approved.

Here are 6 tips to make your investment loan application a success:

1. Save a bigger deposit.

A 20% deposit is a big ask, but it makes you a less risky borrower (and lets you save on LMI).

2. Check your credit score.

A quick check of your credit score is always a good idea. Sometimes there are red flags or errors you might not have noticed. If it's not in great shape, it's time to start improving it.

3. Trim your spending.

Cutting back on unnecessary purchases in the 3 months leading up to your application boosts your chances of approval.

4. Compare loans and lenders.

Every lender has different eligibility criteria. Some may be stricter when lending to investors.

5. Choose your property carefully.

If the property you're buying looks like a riskier investment due to its size, property type or location, the lender might reject your application.

6. Talk to a mortgage broker.

A qualified broker can help match you up with a bank or lender whose policies and criteria best suit your personal situation.

Why the quality of your investment property matters

Lenders use your property as security. If you can't repay the loan then your lender has to sell the property to recover its debt.

"Assuming a lender will accept every property is a mistake," buyer's advocate and property investment adviser Cate Bakos told Finder. "I've seen investors purchase properties with limited kitchen facilities in place only to be shocked when the property is rejected altogether by the lender.

"If a lender already has too many borrowers investing in similar property types to yours in the same postcode it may reject your application. This reduces the lender's exposure to risk."

Risks and benefits of investing in property

Property investment can be both risky and rewarding. Here are some of the potential risks and benefits you should think about:

Benefits

  • Rental income. You can earn rental income that puts cash in your pocket right away.
  • Capital gain. If you hold the property for a long time, it could grow in value significantly.
  • Tax and depreciation benefits. You can deduct investment loan interest charges and other investment costs from your income tax each month, making the cost of owning a property far more affordable.
  • The potential to add value. Unlike shares or other investments, you may be able to increase your investment's value through renovations.

Risks

  • Purchase costs. There are also many upfront costs for investors, including lenders mortgage insurance (LMI), stamp duty, building and pest inspections, conveyancing and legal charges.
  • Ongoing costs. There are many ongoing costs such as repairs, strata fees and council rates.
  • Managing tenants. Being a landlord means dealing with the tenants in the property.
  • Illiquid asset. It can take months to sell an investment property if you need to generate cash.

Common wisdom is to opt for an interest-only investment loan so you maximise your tax deductions. And it's a sound approach. The only exception is if you have already paid off the mortgage on your own home. This is not tax-deductible. At that stage, consider going principal and interest and throwing all the money you can at that investment loan to create a debt-free source of income in retirement.

Nicole Pedersen-McKinnon

Nicole Pedersen-McKinnon
Freelance finance journalist

What investment strategies are there?

Investing in property allows Australians to build investment wealth in 2 ways:

  1. Rental income each month.
  2. Capital gains as the property's value grows over time, either through renovation or predicting the market.

Many investors ideally want to purchase properties that offer a consistent rental income and a high capital growth over time.

But investors in Australia have a big tax advantage: negative gearing. Even if your investment costs outweigh the rental returns in a financial year, you can use the loss to shrink your tax bill.

"Property investment is a game of finance with some houses thrown in the middle," Metropole Property Strategists founder and CEO Michael Yardney said.

"Beginning investors think they can just go to any bank, get the lowest loan rate and they will be set. But strategic investors don't use finance to buy properties, they set up their finance to buy the time to ride the ups and downs of the property cycle so their investment properties can increase in value, giving them the equity and cash flow to buy further properties."

Why you can trust Finder's home loan experts

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Frequently asked questions

  1. Finder's database, accessed 8 February 2024
  2. ABS lending indicators, accessed 8 February 2024

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