Investment home loans
Overview
Successful property investing starts with the right finance strategy. Your loan structure, lender choice, repayment type and access to equity can all play a role in how well your investment works now and in the future.
At Clarity, we help investors choose finance that supports their goals, whether you’re buying your first investment property, growing your portfolio, refinancing, or building. We’ll guide you through the lending options, explain the pros and cons clearly, and help structure your loan with your cash flow, borrowing capacity and long-term plans in mind.
Where tax considerations like negative gearing may apply, we can work alongside your accountant or financial adviser to help ensure your lending strategy fits your broader financial picture.
Smart lending strategies for property investors
Hear what makes Clarity different
Clarity is a dedicated team of financial professionals committed to providing tailored solutions for your financial needs. With a focus on clarity and transparency, we guide our clients through the complexities of financial planning, investment strategies, and wealth management. Our experienced advisors work closely with you to ensure your financial goals are met with confidence and clarity.
Backed by proven results
Frequently
asked questions
An investment property loan is a type of home loan used to purchase a property you intend to rent out or hold for long-term capital growth, rather than live in yourself.
These loans are similar to owner-occupied loans, but the approval criteria and interest rates often differ. Lenders assess your income, assets, and liabilities as they would with any home loan, but they’ll also look at the potential rental income from the property to determine your ability to service the loan. In most cases, lenders require a larger deposit than for an owner-occupied property.
At Clarity, we’ll help you compare options from over 55 lenders to find a solution that supports your property investment strategy, whether you’re planning to hold and rent, renovate, or build a long-term portfolio.
Generally, interest rates for investment loans are slightly higher than for owner-occupied home loans. That’s because lenders view investment lending as a higher risk, due to factors like potential vacancies or fluctuations in the rental market.
Our brokers can compare rates across a wide range of lenders and help you find a competitive loan structure, whether you’re purchasing your first investment or adding to your portfolio.
There isn’t one best loan that suits every first-time investor, the right choice depends on your personal goals, financial position, and long-term strategy.
Some key features to consider include:
– A competitive interest rate (variable or fixed)
– An interest-only period to maximise cash flow in the early years
– A 100% offset account, if available
– Low or waived fees
– The ability to make extra repayments
At Clarity, we take the time to understand your investment plans and recommend a loan that fits your short-term cash flow needs and long-term wealth goals.
Yes, many lenders offer investment property loans with as little as 10% deposit. However, it’s important to weigh up the pros and cons.
If your deposit is less than 20%, you’ll usually need to pay Lenders Mortgage Insurance (LMI), which can add a significant cost to your purchase. That said, for some investors, getting into the market sooner (even with LMI) may still make financial sense.
Having a 20% deposit or more helps avoid LMI and may unlock more favourable interest rates.
We’ll help you assess both pathways so you can decide what’s right for you.
Rental income plays a key role in helping you qualify for an investment property loan. Lenders include a portion of your expected rental income in your serviceability assessment to determine how easily you can manage the loan repayments.
Typically, lenders will use 70–80% of the anticipated rent (to allow for potential vacancy and costs). You’ll usually need to supply a rental appraisal from a licensed real estate agent as part of your application.
There can be, but it’s important to seek independent tax advice before making any decisions.
In general, the interest you pay on your investment loan is usually tax-deductible against your rental income. You may also be able to claim deductions for loan fees, maintenance, depreciation, insurance, and other property-related costs.
Many property investors also benefit from negative gearing, where the cost of owning the investment exceeds the income it generates. This loss may reduce your taxable income, depending on your individual financial situation.
Your mortgage broker can help structure your loan in a tax-efficient way, but we always recommend speaking to a qualified accountant to make sure you’re making the most of available benefits.
Interest-only loans allow you to pay just the interest on your loan for a set period (typically 1–5 years). This means lower monthly repayments and higher cash flow, which can be helpful when you’re growing your portfolio or managing renovations. As you won’t be paying down the loan balance during the interest-only period, this keeps your tax-deductible debt higher. But, you will need to factor in possible higher repayments after your interest-only period ends.
Principal-and-interest loans include repayments on both the interest and the original loan amount (the principal), which helps you pay down the loan and build equity in the property faster.
We’ll help you weigh up both structures to find the best fit for your goals, cash flow, and investment timeline.