Links Property Finance · Investment property mortgage broker, Sydney: Investment Loan FAQ

With your own numbers rather than the listings. Work out the savings or usable equity you have, how much you could carry each month if the property sat empty for a while, how long you expect to hold it and what buffer you want left afterwards.

Then have the lending tested across lenders, with the rent counted at a discount, before you settle on a price range. That way you shop with finance you know is available, instead of finding a gap after signing. Our investment loans page sets out how that process runs.

When the valuation or the property works against you. The 20% that avoids lenders mortgage insurance is measured against the lender’s valuation, so a valuation below the contract price leaves a gap to fund from cash or equity.

Some lenders also cap the loan lower for small units, high-density buildings or certain locations, which lifts the deposit needed.

On top of the deposit, transfer duty applies at standard rates, because first home buyer concessions are for owner-occupiers, and legal and other purchase costs add to the cash required. The LVR and insurance calculator lets you test your ratio at a figure below the price.

Generally, yes. Rates for investment loans usually sit above those for a home you live in, interest-only investment loans often cost more again, and the assessment tends to be stricter. The gap varies between lenders and over time, so compare the rate you would pay rather than an advertised one.

The lowest rate is not always the right investment loan either, because the way the loans are set up shapes your cash flow and whether you can buy again, so it deserves as much attention as the price.

Because the lender is testing whether you could keep paying through a vacancy or a costly repair.

The rent figure usually comes from an agent’s rental appraisal, an existing lease or the valuer’s assessment, and the lender then counts only part of it to allow for empty weeks, agent fees, rates, strata and upkeep.

Short-stay income is treated more cautiously again, and some lenders leave it out. So compare the discounted rent, not the advertised rent, with the repayment at the assessment rate. The borrowing power calculator applies that discount for you.

Because the lender’s test is harsher than a spreadsheet. It counts only part of the rent, tests the repayment at a rate above the one you would pay, usually assesses existing investment debts the same way, and treats any tax benefit cautiously.

Where the gap is small, it can sometimes be closed without more income: by choosing a lender whose assessment suits your mix of income and debts, reducing unused credit limits, or restructuring older loans. Where the gap is large, the price range or the timing may need to change instead.

Several things that are easy to overlook. Credit cards are assessed on their limit rather than the balance, and buy now pay later accounts, personal loans and car leases all count as commitments.

Existing investment loans are usually assessed at a buffered rate rather than the rate you pay, and interest-only debts may be assessed on their eventual principal and interest repayment.

Investors also reach debt-to-income thresholds sooner, because each purchase adds debt faster than it adds income. If you rent where you live, your own rent counts as a living expense.

Usually as a separate split on your home loan, sized to cover the deposit, transfer duty and purchase costs, while the new property’s own loan covers the rest. Together the two loans can reach the full price plus costs, so the repayments on both need to fit your budget.

Timing matters too: the release has to be approved and funded before the deposit is due at exchange, or a deposit bond may be needed in the meantime. Keeping that split for the purchase alone also keeps its use clear. The using equity guide walks through each step.

As a rule of thumb, 80% of your home’s value as assessed by the lender, minus what you still owe, without lenders mortgage insurance. That usable figure is always smaller than your total equity.

The value is the lender’s valuation, not a listing site estimate, and a valuation that lands low reduces the release. Serviceability is usually the real limit, because your income has to carry the enlarged borrowing at a buffered rate. The home equity calculator gives a first read.

The main one is that your home secures the investment: if it underperforms through vacancy, rate rises or a soft resale, the debt against your home remains, and your position is concentrated in one asset class.

Interest-only periods can flatter early cash flow before the repayment steps up. None of that rules the strategy out, but it does call for careful stress-testing before you sign. Our worked equity scenario shows how that plays out.

Mostly the things you do after settlement. Selling one property can lead the lender to revalue the one you keep and ask for more of the sale proceeds to go towards the remaining debt.

Moving one loan to another lender generally means untangling both, and a fall in value on one property can limit what you do with the other.

Releasing equity later may involve valuing everything held as security. An existing arrangement can usually be separated through a restructure or refinance, which needs a fresh assessment, so it is simpler to keep each property on its own loan from the start.

Usually, yes, measured in total interest. The balance stays the same during the interest-only years, commonly one to five, so interest is charged on the full amount for longer, and the rate is often higher as well. The case for it rests on what happens to the money it frees up.

Held in an offset account against your home loan, for example, it may do more good than the extra interest costs, but only with discipline. Model both repayment types over your expected hold. The interest-only guide sets out the trade-offs, and the tax side belongs with your accountant.

Repayments switch to principal and interest over the years left on the loan, so they rise. You can accept the new repayment, apply for a further interest-only period or refinance, and each option needs the lender to reassess you at the time.

A few everyday moves. Redrawing from an investment loan to pay for a car or a holiday, taking a deposit from a home loan redraw instead of a separate split, combining both debts into one loan at a refinance, or topping up one loan for several purposes at once can all blur what each borrowed dollar was used for.

Many of these start with redraw, where an offset account would have kept your own savings separate from the loan, as our offset accounts guide explains. A mixed trail is hard to unpick, so ask your accountant how the tax treatment works before you draw or restructure anything.

The use changes, and the loan may need to follow. Your loan contract may require you to tell the lender, and the loan may then be priced as investment lending.

If you borrow for your next home, the lender counts the new rent at a discount and assesses both loans together.

On tax, the treatment of interest generally follows what the borrowed money was used for, so paying the loan down and later redrawing for your next home can leave less of the debt tied to the rental than holding savings in an offset would. Ask your accountant before you move, not after.

No. In general terms, a negatively geared property costs more to hold than it earns, and any tax benefit offsets only part of that loss, depending on your circumstances and the tax rules at the time.

The shortfall comes from your own cash through the year, while any benefit usually arrives later, unless a variation to the tax withheld from your pay is arranged with the ATO. Lenders treat the benefit cautiously too, so your income still has to carry the loan.

Whether it applies to you, and what it is worth, is a question for your accountant or tax adviser.

Links is a credit business, not a tax adviser, so these are questions to ask rather than answers.

Will the interest be deductible, given how the funds will be used? Are depreciation or other deductions available on this property? What are the capital gains consequences of a later sale, and could land tax apply? Whose name, or which structure, should the property be bought in? Releasing equity is borrowing, not income, but the use of each borrowed dollar matters. Ask before settlement, not after the financial year ends.

Not for a residential property if the borrowing starts on or after 10 August 2026: a new limited recourse borrowing arrangement can only buy business real property, such as commercial premises.

Arrangements and contracts entered into before that date keep the old rules. A complying self managed super fund borrows through a limited recourse borrowing arrangement, subject to superannuation law and the fund’s trust deed.

The property is held in a separate trust, the lender’s recourse is limited to that asset, and the fund makes the repayments.

Fewer lenders offer this, deposit requirements are generally higher, and most want liquidity left in the fund after settlement. Whether it suits your retirement strategy is for your accountant or licensed financial adviser. Our SMSF lending page explains the structure.

It is possible, but fewer lenders will lend to a trust or company, so lender selection matters more than an advertised rate.

Ownership and tax structure are questions for your accountant or solicitor, and they are best settled before you sign a contract, because buying in the wrong name is expensive to unwind. Once the structure is chosen, the lending is matched to it. Our trust and company lending page covers what lenders look at.

Yes. Renting where you live and buying elsewhere is assessed as an investment purchase, so it is priced and assessed like one, with the expected rent discounted. Your own rent counts as a living expense, which often lowers the borrowing figure.

First home buyer stamp duty concessions and the Australian Government 5% Deposit Scheme are generally designed around owner-occupation, so buying an investment first commonly means forgoing them, and it can affect your status later. The rentvesting guide covers both sides.