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!
1 Year Discounted Variable Rate, Interest Only
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).
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).
Read our Mozo Review to learn more about the Smart Booster Investor Bundle Home Loan
Investor, Principal & Interest, LVR <80%
Zero ongoing fees and free extra repayments and redraw facility with an option for an offset account. Winner of the Offset Home Loan Expert's Choice Award for 2021.
Zero ongoing fees and free extra repayments and redraw facility with an option for an offset account. Winner of the Offset Home Loan Expert's Choice Award for 2021.
Read our Mozo Review to learn more about the Well Balanced
Investment, Interest Only
Lock in a low home loan rate with the 2020 Home Lender Bank of the Year, UBank. UHomeLoan offers competitive rates for a range of fixed terms .
Lock in a low home loan rate with the 2020 Home Lender Bank of the Year, UBank. UHomeLoan offers competitive rates for a range of fixed terms .
Read our Mozo Review to learn more about the UHomeLoan
<60% LVR, Investment, Principal & Interest
Enjoy zero fees and a speedy online application process. Free extra repayments and redraw facility. Flexible loan repayments. Minimum 20% deposit required. Winner of three Mozo's Experts Choice Awards for 2021.
Enjoy zero fees and a speedy online application process. Free extra repayments and redraw facility. Flexible loan repayments. Minimum 20% deposit required. Winner of three Mozo's Experts Choice Awards for 2021.
Read our Mozo Review to learn more about the Celebrate Variable Home Loan
Investment, Principal & Interest, LVR <70%
A low rate for investors looking for a fast and flexible home loan. No credit scoring or ongoing fees. Extra repayments and redraw available. Get a dedicated specialist for the loan application process.
A low rate for investors looking for a fast and flexible home loan. No credit scoring or ongoing fees. Extra repayments and redraw available. Get a dedicated specialist for the loan application process.
Read our Mozo Review to learn more about the Prime Home Loan
60-70% LVR, Investment, Principal & Interest
Zero fees with speedy online application. Free extra repayments and redraw facility. Flexible loan repayments. Min. 20% deposit. Winner of three Mozo's Experts Choice Awards for 2021.
Zero fees with speedy online application. Free extra repayments and redraw facility. Flexible loan repayments. Min. 20% deposit. Winner of three Mozo's Experts Choice Awards for 2021.
Read our Mozo Review to learn more about the Evaporate Variable Home Loan
Investor, Principal & Interest
A low-rate home loan that could save you thousands. No ongoing fees. Unlimited additional repayments. Unlimited free redraws with no minimum redraw amount, Limited time only.
A low-rate home loan that could save you thousands. No ongoing fees. Unlimited additional repayments. Unlimited free redraws with no minimum redraw amount, Limited time only.
Read our Mozo Review to learn more about the Smart Home Loan
70-80% LVR, Owner Occupier, Principal & Interest
Fast online application with no fees. Free extra repayments and redraw facility. Min 20% deposit. To reward borrowers for paying down their home loan, Athena will now automatically lower the rate as the loan is paid down. Winner of three Mozo Expert's Choice Awards for 2021.
Fast online application with no fees. Free extra repayments and redraw facility. Min 20% deposit. To reward borrowers for paying down their home loan, Athena will now automatically lower the rate as the loan is paid down. Winner of three Mozo Expert's Choice Awards for 2021.
Read our Mozo Review to learn more about the Liberate Variable Home Loan
Investment, Principal & Interest
Lock in a great low home loan with UBank. Fast and easy online application. No monthly account fees.
Lock in a great low home loan with UBank. Fast and easy online application. No monthly account fees.
Read our Mozo Review to learn more about the Fixed UHomeLoan
^See information about the Mozo Experts Choice Home loans Awards
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How much could you save by switching your home loan? Compare savings from over 500 home loans. Find out in a few clicks.
Who can resist the allure of the buzzing property market? Your property is likely to appreciate in value, plus if you get a tenant the rent could cover your ongoing repayments and other associated property costs.
Even if your property is negatively geared, when tax time comes you can deduct the amount you’ve lost on your property to bring down your taxable income. Sounds like a good arrangement, 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 one that’s right 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 requirements 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. A guarantor 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 that when banks assess you for an investment property loan, they’ll conduct a stress test to see if you can comfortably service the loan at a higher interest rate.
While this was once set at around 7%, this has been lowered to better reflect the current interest rate environment, and nowadays banks can now set their own minimum interest rate floor when determining a borrower’s serviceability. For an idea of how much you could afford to repay if rates were to climb, use our rate change calculator.
Investment home loans function much the same way as owner occupier home loans, in that banks will lend a certain amount to a borrower, an interest rate (which will be either variable or fixed) will be applied, and borrowers will be expected to pay off the principal and interest in regular installments over the life of the loan.
There are, however, a few key differences between the two. Along with the difference in LVR requirements, investment loans generally come with a higher interest rate than those offered to owner occupiers (though with interest rates currently at all-time lows, the difference might not be too much to worry about). You can also expect some additional closing costs, like an appraisal fee.
As with any other loan, banks will want to see that you have a good credit history, genuine savings and stable employment, but you might have to jump through a few more hoops. For example, a lender might request a statement of potential rent from a real estate agent.
Typically, lenders would consider around 80% of rent from investment properties in their income assessments. But in the current climate, it’s not unusual to have a discount of as much as 50% applied to rental income. That means if you intend to rent out a property for $500 per week, your lender will only count $250 of that when determining your ability to service a loan.
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.
Consider this scenario: Sarah wants to borrow a total of $500,000 paid back over 25 years. Our home loan repayments calculator shows that with a 3% interest rate, if she chose the principal and interest repayment option, her monthly repayments would be $2,371. 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 $1,250.
Another reason interest only home loans are a popular option for investors is because of 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 and property 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 just 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, and 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.
Do not recommend! NAB or your broker will lock you into a non-competitive rate and charge you the $395/year on top of this so you can wait 1+hour to talk to 3 people in a call centre who will all ask you the same questions despite you having answered them and waste your precious life and then decide they can't help you anytime you have a query. While some try to, for whatever reason, their system is always slow or down, none of their back-end team are ever connected or seem to be in the same place as each other so you're dealing with a completely silo'd and disconnected group of people. When you finally get through to someone, you spend another 1 hour talking to someone in Australia (which is what the $395 plus your excessive interest rate is paying for presumably), guaranteeing you XYZ with no follow-up in writing before not actioning your query. You are then left to join the call centre queue again and if they don't hang up on you after the 1 hour+ you are in line, they'll screw up your query again and again and again. They used to assign a retention officer if they really screwed up (thrice over 2 years for me) with email details so you didn't have to wait in line but they know longer do this anymore, presumably due to high demand and all the screw-ups. Their first offer after a complaint is to refund the yearly fee and if you threaten to go to the Financial Ombudsman they may then write you a polite email - no other financial refund is available despite you being penalised in time and money for their shortcomings. Really do you numbers to see if you need to be using a Big 4 bank - the interest rate is everything. A half a % change can mean 000's saved in a year and more in the long run and breaking a fixed rate can be earnt back within a reasonable time if you get a spreadsheet out and just use an afternoon to see how it all works. If you've only got a year or two left on a fixed loan, the economic break cost is generally under 1k and if another provider is offering 3-4k joining bonus, just do it (there are also exit fees). This was a revelation for a non-numbers person after I just became so frustrated with being ripped off. Don't get drawn into the big banks providing a "safety net" - they are just using their excess fees to try to pay for their clunky, dated systems and all the support they need for this, CBD offices and amenities, Australian-based call centre staff and management teams to design KPIs, scripts, incentives for staff etc.
Read full reviewDo not recommend! NAB or your broker will lock you into a non-competitive rate and charge you the $395/year on top of this so you can wait 1+hour to talk to 3 people in a call centre who will all ask you the same questions despite you having answered them and waste your precious life and then decide they can't help you anytime you have a query. While some try to, for whatever reason, their system is always slow or down, none of their back-end team are ever connected or seem to be in the same place as each other so you're dealing with a completely silo'd and disconnected group of people. When you finally get through to someone, you spend another 1 hour talking to someone in Australia (which is what the $395 plus your excessive interest rate is paying for presumably), guaranteeing you XYZ with no follow-up in writing before not actioning your query. You are then left to join the call centre queue again and if they don't hang up on you after the 1 hour+ you are in line, they'll screw up your query again and again and again. They used to assign a retention officer if they really screwed up (thrice over 2 years for me) with email details so you didn't have to wait in line but they know longer do this anymore, presumably due to high demand and all the screw-ups. Their first offer after a complaint is to refund the yearly fee and if you threaten to go to the Financial Ombudsman they may then write you a polite email - no other financial refund is available despite you being penalised in time and money for their shortcomings. Really do you numbers to see if you need to be using a Big 4 bank - the interest rate is everything. A half a % change can mean 000's saved in a year and more in the long run and breaking a fixed rate can be earnt back within a reasonable time if you get a spreadsheet out and just use an afternoon to see how it all works. If you've only got a year or two left on a fixed loan, the economic break cost is generally under 1k and if another provider is offering 3-4k joining bonus, just do it (there are also exit fees). This was a revelation for a non-numbers person after I just became so frustrated with being ripped off. Don't get drawn into the big banks providing a "safety net" - they are just using their excess fees to try to pay for their clunky, dated systems and all the support they need for this, CBD offices and amenities, Australian-based call centre staff and management teams to design KPIs, scripts, incentives for staff etc.
I have worked in the finance industry for over 30 years and without a doubt Mortgage House is the worst Mortgage Brokering company I have dealt with on many levels: 1. Communication - The broker Ken Sayer is elusive and refuses to accept phone calls, he only makes 15 minute appointments and his team does not return phone calls and ignore requests to do so. 2. Pricing - We have 25% deposit and they are asking for a risk fee with any explanation as to why. Sounds like a simply money grab. 3. Trust & Convenience- The broker did not build any rapport, explain the process, discuss our requirements or exhibit any behaviour that he was working for our benefit. The lack of communication with loan detail is far from convenient because it leaves us wondering what is happening. 4. Customer service is non existent, it is almost as I am an inconvenience to their day. Don't they realise, the customer is the reason they exist.
Read full reviewI have worked in the finance industry for over 30 years and without a doubt Mortgage House is the worst Mortgage Brokering company I have dealt with on many levels: 1. Communication - The broker Ken Sayer is elusive and refuses to accept phone calls, he only makes 15 minute appointments and his team does not return phone calls and ignore requests to do so. 2. Pricing - We have 25% deposit and they are asking for a risk fee with any explanation as to why. Sounds like a simply money grab. 3. Trust & Convenience- The broker did not build any rapport, explain the process, discuss our requirements or exhibit any behaviour that he was working for our benefit. The lack of communication with loan detail is far from convenient because it leaves us wondering what is happening. 4. Customer service is non existent, it is almost as I am an inconvenience to their day. Don't they realise, the customer is the reason they exist.
This bank is nothing but trouble the entire way. We were charged 4 thousand because they took 60 days to get the finance. Then they we sold some land everyone had to wait literally 4 months just for mystate to do their part. My conveyancer and i have never seen anything like it. I could go on and on and on they literally dont care they are the slowest in the world and have zero problem stuffing you around non stop no matter how urgent your situation is they will not help you. Stay away
Read full reviewThis bank is nothing but trouble the entire way. We were charged 4 thousand because they took 60 days to get the finance. Then they we sold some land everyone had to wait literally 4 months just for mystate to do their part. My conveyancer and i have never seen anything like it. I could go on and on and on they literally dont care they are the slowest in the world and have zero problem stuffing you around non stop no matter how urgent your situation is they will not help you. Stay away
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Find the right home lender fast. Mozo details all home loan providers along with their home loan products right here so you compare rate, fees and features easily.
