Investor lending is assessed differently

Lenders review your existing property debts, income, household expenses and expected rent from the new property. They typically apply a haircut to proposed rental income and use their own servicing rate. The result can differ significantly from an owner-occupied borrowing estimate.

Plan the upfront and ongoing costs

Budget for the deposit, stamp duty where payable, legal costs, inspections, landlord insurance, strata levies if relevant, property management, repairs and vacancy periods. Your rent may not cover every cost, particularly when interest rates or maintenance expenses rise.

Choose loan features for your strategy

Interest-only repayments may improve short-term cash flow but are not suitable for every investor and do not reduce the principal during the interest-only period. Principal and interest repayments reduce the balance. Offset accounts, redraw facilities and split loans can also matter, depending on your circumstances.

Get tax and legal advice

Loan purpose and account structure can have tax implications, especially when refinancing or drawing equity. A broker can assist with lending options, while your accountant and solicitor should advise on tax treatment, ownership structure and legal obligations.