We know there’s plenty to consider when you’re investing in property, so take the guesswork out of your research by using our comparison tool below.
Whether you’re looking to add to your portfolio or are investing for the first time, there are a number of investment home loans with a low down payment of 10% or less. Keep in mind, with many low deposit home loans you may be required to pay lenders mortgage insurance (LMI) if you fall short of a 20% deposit. Start comparing now!
Search promoted home loans below or do a full Mozo database search. Advertiser disclosure.
Sorted by:
Mozo Order
1.99% p.a.variable for 12 months and then 2.74% p.a.
2.71% p.a.
Interest Only
1.99% p.a.variable for 12 months and then 2.74% p.a.
2.71% p.a.
A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends).
2.69% p.a.
2.70% p.a.
Investment, Principal & Interest, 60-80% LVR
2.69% p.a.
2.70% p.a.
Enjoy smart, flexible and cost-effective home loan rates from innovative online lender, homeloans.com.au. Complimentary 100% offset account, free online redraw. Unlimited additional repayments. Zero application or annual fees. Fast online application process.
2.79% p.a.Apply now to get this rate from 30 Sep
2.79% p.a.Apply now to get this rate from 30 Sep
<60% LVR, Investment, Principal & Interest
2.79% p.a.Apply now to get this rate from 30 Sep
2.79% p.a.Apply now to get this rate from 30 Sep
Zero fees with speedy online application. Free extra repayments and redraw facility. Flexible loan repayments. Min. 20% deposit. Crowned Best New Home Loan for 2020 by the Mozo Experts.^
3.24% p.a.
3.26% p.a.
Investment, Principal & Interest
3.24% p.a.
3.26% p.a.
No monthly or ongoing fees. Unlimited additional repayments.
^See information about the Mozo Experts Choice Home loans Awards
Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.
How much could you save by switching your home loan? Compare savings from over 500 home loans. Find out in a few clicks.
Views, news, tips and guides to help find the home loan for you.
Who can resist the allure of the buzzing property market? Your property is likely to appreciate in value, plus if you get a tenant in the rent could cover your ongoing repayments and other associated property costs.
Even if your property is negatively geared, when it comes to tax time you can deduct the amount you’ve lost on your property to bring down your taxable income. Sounds awesome right?
While investing in property has its many perks, there are some things you’ll need to keep in mind when looking for investment home loans to ensure you pick the right loan for you.
The first thing you should think about is your...
The Australian Prudential Regulation Authority has been putting pressure on banks to reduce their investment loans book to under a 10% growth per annum.
As a result major banks are beginning to put caps on the amount that investors can borrow and are generally implementing new eligibility which requires investors to have a loan to value ratio of 80% or less.
If more lenders in Australia follow suit and you’re a first timer wanting to purchase your first investment property you will either need to wait until you have saved up a 20% deposit (e.g 80% LVR) or ask your parents to be your home loan guarantor, which means they will put up a portion of their own home as security for your investment loan to help you get approved.
Another thing to keep in mind is big banks have also increased their stress tests, which means when they assess you for an investment property loan they will see if you can comfortably service the loan at a higher interest rate. For instance, if their standard variable interest rate is 5%, they may use a 7.5% scenario to see if your income could easily manage a rate rise in the future. Get an idea of how much you
could afford to repay if rates were to climb, by using our rate change calculator.
Once you know you fulfill the requirements when it comes to the amount you’re looking to borrow, it’s time to think about the type of investment property loan you’ll sign up with. One of the more popular options is choosing an interest only home loan. Read on for a full definition:
Interest only home loans
As the name suggests, unlike a standard home loan where you repay both the principal and the interest, with an interest only investment loan you’ll only repay the interest. This means that your ongoing repayments will be significantly lower.
Check out this scenario: Sarah wants to borrow a total of $500,000 paid back over 25 years. Our home loan repayments calculator shows with a 5% interest rate, if she chose the principal and interest repayment option her monthly repayments would be $2,923. But if she opted for the interest only option for the first 5 years, during this period her ongoing payments would be brought down to $2,083.
Another reason interest only home loans are a popular option for investors is because of a little something called negative gearing, which means if the cost of repayments and looking after the property is more than your returns in rent, you can claim the home loan interest andproperty maintenance come tax time and potentially get a partial to substantial refund on that amount.
While the interest only period won’t last forever (generally for 5 years) and you’ll eventually have to start paying off both the interest and principal, you could negotiate at the end of the interest only period to have it extended for another 3-5 years.
But keep in mind, interest only home loans aren’t for everyone. The whole point of an interest only loan is you’re relying on your property’s value to increase over time. This can be risky if you’re buying in an area that could see a drop in property prices down the track, so in this instance you may be better off paying down both the
principal and interest.
Variable, fixed or split interest rate?
Whether you choose an interest only investment loan or the standard principal and interest repayments, you’ll be able to choose the type of interest rate to suit you.
Picking up your first investment property can be an exciting time in a borrower’s life, so why make things complicated by trying to find the right home loan? While that’s not to say you should choose any, as having the right loan and interest rate on your side can help you save a bundle. Our Home Loans Interest Rates page not only makes home loan comparison easy, but allows you to find the right interest rate for your needs.
Yes, once you’re signed up with an investment property loan, it’s a smart move to get your salary deposited into an offset account linked to your mortgage, rather than a bank account because you’ll reduce the amount of interest you pay.
Let’s go back to our scenario of investor Sarah. Once she is approved for her $500,000 investment home loan, if Sarah puts $30,000 worth of savings into a linked offset account, this will mean instead of being charged interest on the full $500,000, she would only accrue interest on $470,000. Once Sarah has saved up enough in her offset account, she can easily access the money to use it as her deposit for her next investment property, thus growing her investment portfolio.
Just like any other home loan, there are some fees to watch out for when taking out an investment home loan. Here are the common charges:
Upfront fee: When you apply for an investment loan, the bank will have to run a credit check on you to see if you are a risky borrower. To cover this cost and any administration costs involved in assessing you for the investment property loan you may be charged a one off upfront fee anywhere between $0-$800.
Ongoing service fees: There may also be a small ongoing fee of around $10 that the lender charges for providing you with the loan.
Breakcost fees: Banned on variable rate loans back in 2011, breakcost fees can still be charged if you try to pay out a fixed rate loan early.
Each bank or financial lender will ask for different documentation when you apply for one of their investment loans, however generally they will require:
Often it can be hard for small business owners and sole traders to come up with the necessary paperwork like payslips or a letter from your employer for investment loans. So if you’re self employed or work under an ABN, you may need to apply for a home loan with more flexibility when it comes to documentation.
The solution is applying for a low doc home loan that allows you to have less documentation. But there’s a catch, usually the interest rate will be higher and you’ll also need to have a lower loan to value ratio of 60% (e.g 40% or more deposit).
Ready to kick off your investment property loans comparison? Scroll up to the top of this page to compare home loans in our investor table or punch in your numbers into our home loan comparison calculator to search our entire database.
How much could you save by switching home loans?
Home loans switch and save calculatorHow much will my repayments be?
Mortgage repayments calculatorHow will rate changes affect my repayments?
Home loan rate change calculatorWhich home loan will cost me less?
Home loan comparison calculatorHow much will I save with extra repayments?
Home loan extra repayments calculatorHow much can I afford to borrow?
Home loan borrowing calculatorHow much do I have to pay?
Stamp duty calculator
CBA offers some great competitive rates, a really use friendly and great online banking system and app, and offers as many offset accounts as you like.
Read full reviewCBA offers some great competitive rates, a really use friendly and great online banking system and app, and offers as many offset accounts as you like.
Great service, friendly staff, fair interest rates.
Read full reviewGreat service, friendly staff, fair interest rates.
The Bankwest home loan customer service is top notch. I called to fix my interest rate and the bank officer talked me through the process. I had to put additional funds in, so I called him a few months later when I had the funds ready and he helped me in 2 minutes over the phone! They always call back when you leave a message and I think their fixed rate is very competitive. Awesome service so far.
Read full reviewThe Bankwest home loan customer service is top notch. I called to fix my interest rate and the bank officer talked me through the process. I had to put additional funds in, so I called him a few months later when I had the funds ready and he helped me in 2 minutes over the phone! They always call back when you leave a message and I think their fixed rate is very competitive. Awesome service so far.
More home loan reviews
