If you're looking to invest in property in Australia, an investment property loan can help you achieve your goals. Our experienced mortgage brokers can find a loan that is specifically designed for investors who want to purchase a property to generate rental income or for long-term capital growth.
An investment property loan allows you to borrow up to 90% of the value of the property, with flexible repayment terms ranging from 1 to 30 years. Our team of mortgage brokers can help you find an investment property loan with highly competitive interest rates, making it an affordable option for investors who want to maximise their returns.
We understand that every investor is different, which is why we can help secure a range of loan features to suit your needs. Whether you want a fixed or variable interest rate, interest-only or principal and interest repayments, or the ability to make extra repayments, we can tailor our loan recommendations to suit your specific requirements.
Our team of experienced lending specialists are here to guide you through the application process, from pre-approval to settlement, and provide ongoing support throughout the life of the loan. So, if you're ready to take the next step in your property investment journey, apply for an investment property loan with us today and start building your portfolio.
There are two primary types of property investment loans to choose from:
A fixed interest loan is an investment home loan that will retain the same interest rate for as long as it’s active. The interest rate that you lock in at the time of signing the contract is the interest rate that you will have throughout the life of the loan.
Even if the rates increase as the market fluctuates, you won’t have to worry about experiencing an increased rate.
A variable interest loan will fluctuate interest rates throughout the life of the loan. These are more flexible and generally easier to pay off without an exit fee. However, the interest rates can become so high that it can make the loan more challenging to pay off.
You can also split your loan into both variable and fixed interest portions. For this, you’ll agree to pay a variable interest for a specific amount of time. After that, you’ll lock in a fixed interest rate.
There are a number of factors you’ll want to look at when comparing investment property loans in Australia. When searching for the ideal mortgage, here are the things you want to consider:
As we’ve said, interest rates are one of the most important factors that will impact how you pay off your loan over time. A high interest rate will result in a higher repayment, which may make the loan more difficult to pay off. You might have to stretch the payments out further, resulting in more interest payments and a longer period of repayments, until you can actually turn a profit on your investment.
A lower interest rate will result in lower payments. That means you might be able to pay the loan off faster. In turn, you could then turn a profit sooner.
Keep in mind that interest payments are tax deductible expenses, so getting the lowest possible interest rate isn’t as important as finding the right loan for your needs.
Fees are also tax deductible, but that doesn’t mean that you want to pay any more fees than necessary. There are a number of fees baked into the cost of getting a mortgage, such as origination and application fees.
Every broker will charge different fees for different services. It’s important to know what you’re paying for ahead of time.
An offset account is an example of a loan feature. This is when you accrue money in a separate bank account that reduces the amount of interest you pay over time throughout the life of the loan. The more money you add to the offset account, the less interest you pay.
The importance of these features all depend on how you plan to strategise your investments. Some investors might want an offset account while it might not matter at all for others.
The loan to value ratio or LVR is the amount of money you can borrow compared to the value of the property. 80% LVR means you need to put down at least 20% if you expect to get the loan. The smaller the deposit, the higher the LVR you need to qualify for a loan.
Applying for home loan pre-approval can give you a good idea of how much you could afford to borrow, so you know your limits when searching for your dream home.
The first step of any home buying process is to receive a home loan pre-approval. We’ll walk you through the steps of getting you pre-approved. That way, you have an idea of how much money you’ll be able to spend on the home of your dreams. Not knowing how much you can afford is a scary situation to find yourself in. Making a commitment to purchase a home without knowing this ahead of time is never a smart decision. Let the team at Fox Finance Group walk you through this step-by-step. We’ll give you the freedom of choice and peace of mind that comes from knowing you can afford the homes you’re looking at, based on your debt-to-income ratio.
Apply for pre approvalWhether you’re buying your first home, next home, an investment property, renovating or refinancing, we can help you make your next move with confidence.
Variable rate home lending occurs when the interest rate on your home loans changes over time. These interest rates change as the market changes and, as a result, your home mortgage payments will change as well. As interest rates fall, so will your mortgage payment. As interest rates increase, so will your mortgage payment. The upside to these types of loans is that you generally get better perks when you apply, such as lower introductory rates for a specified period of time. The downside is the unpredictability of these loans and inability to forecast future rates.
Apply for a home loanFixed rate home loans give you the certainty of knowing what your repayments will be during the fixed period.
Home loan interest rates that are fixed do not fluctuate with the market. You’re locked in at the interest rate you received when you were approved. This will result in your payments being the same over time unless you refinance. The positive side of this is that you know exactly what your monthly mortgage payment will be, so you can plan and budget for it accordingly. These loans are less flexible and will not fall during a market where interest rates are declining. People who have fixed rate loans will need to refinance if they want to get a lower interest rate later on during the loan period.
Apply for a home loanCan’t decide between a variable or fixed home loan? You might consider splitting your home loan into part fixed, part variable rate so you can benefit from both certainty and flexibility.
A split loan is a hybrid of the two options. Part of your loan will be dedicated to a fixed interest rate and part of it will be a variable interest rate.
Apply for a loanLower repayments during the interest-only period could help you save more or pay off other more expensive debts.
Interest Only Home Lending is when you pay only the interest for the first number of years during the loan. This will make your mortgage payments lower on the front end but higher on the back end of the loan. There are positives to these types of home loans if you’re trying to buy a second home that may become your permanent home. Paying only the interest will allow you to continue paying the first mortgage while contributing to the second one.
Apply for a home loanAn equity loan lets you borrow against the equity in your home. You could unlock equity to fund a renovation, investment property or more.
A Home Equity Release is a loan that allows you to leverage the equity you have in your home to make improvements. Those changes may help you sell your home for more money someday. It can fund home renovations and you can even use it on a second property. Equity is the difference between the value of your home in the current market and the amount of money remaining on your loan. When you’re paying off a home loan, the equity grows. If your property is increasing in value, the equity you have in your home will increase as well. For example, if you purchased a home for $450,000 and deposited $100,000, you then have $100,000 worth of equity in that house. If the value of the home increases to $500,000, and you pay another $50,000 over time on the house, you then have $200,000 in equity. You can refinance up to 80% of the value of the property and subtract the amount you owe to figure out what you would be eligible for in a home equity loan.
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Enter some basic details about your home loan enquiry in our simple online form.
Discuss your home loan preferences and application information with our friendly Home Lending Specialists.
Your Home Lending Specialist will guide you through all details of your mortgage pre-approval.
Once everything is verified, we’ll discuss your loan contracts together for you to then sign.
Your loan funds will be processed by the lender when settlement is finalised. It's that simple!
Enter some basic details about your home loan enquiry in our simple online form.
Discuss your home loan preferences and application information with our friendly Home Lending Specialists.
Your Home Lending Specialist will guide you through all details of your mortgage pre-approval.
Once everything is verified, we’ll discuss your loan contracts together for you to then sign.
Your loan funds will be processed by the lender when settlement is finalised. It's that simple!
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Our initial property investment enquiry form takes about 1 minute to complete.
Next, our property investment lending specialists will connect with you within 1-2 hours of submitting your obligation-free online enquiry (Monday to Friday) to discuss your next property investment.
Once we receive your supporting documents, your dedicated property investment lending specialist will submit your loan application to the best home loan financier for pre-approval, which can be confirmed in as little as 2 hours. However this can be dependent on several factors:
Ensuring all required information is supplied the lender on application
Dealing with a lender’s turnaround time (lead time)
The responsiveness of the applicant to answers the lender’s questions (if any)
The applicant’s credit history and banking conduct will also determine how fast a property investment pre-approval is confirmed.
Property investment preapprovals typically last from 60-90 days, but this can vary from lender to lender. Your property investment lending specialist will advise you on the full process, simply call us on 1300 665 906 to find out more – or apply now to fast track your enquiry.
Property investment loans work somewhat differently to a traditional home loan a client intends to occupy. Investment properties can generate income for the investor, meaning the investment income is usually factored in the pre-approval assessment process. Investing in a property as opposed to making an owner-occupied purchase are higher risk transactions, meaning the interest rate can differ slightly to a traditional home loan. Speaking to a lending specialist about your next property investment loan is the best move forward to ensure the product suits your needs best. You can speak to a lending specialist on 1300 665 906, or enquire here.
Several factors should be considered before getting a property investment loan. Consider discussing these with your lending specialist before committing to your next property investment:
Generally speaking, a bank will want you to have a minimum of 20% of the property’s value as a deposit to avoid you paying Lenders Mortgage Insurance (LMI).
