Investing in

property

property

There’s no doubt about it - property is a popular investment strategy for many Australians. Many people have built wealth in the historically relatively stable long-term asset class as part of their investment portfolio. To get the most out of your investment, it is important you get the finance right - that’s where your Loan Market broker can help.

Why is buying investment property popular?

Property has historically delivered relatively positive returns for investors because house prices mostly continue to increase over the long term. This has made it popular as a long-term wealth-building strategy. They can also deliver regular rent returns and form part of a tax-friendly strategy.

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How are investment property loans different from owner-occupier loans?

There are a few differences between investment property loans and loans for owner occupiers. Often investment property loans carry a higher interest rate because they could be perceived as riskier. If you already own a property, you may also be able to access equity to go toward the deposit.

Can you get an interest-only loan for an investment property?

Some investors choose interest-only loans for their investment properties, meaning their repayments only cover the interest component of the loan. During this time, the principal isn’t being paid down. These are generally only available for a set timeframe after which the loan will convert to principal and interest.

Something to keep in mind is that interest-only loans often come with higher interest rates and will cost more over the life of the loan as the principal, which the interest is calculated from, does not decrease for a set period of time. They can, however, be a way to maximise tax deductions or temporarily reduce expenses.

What is a smart property investment strategy?

There are many strategies property investors can choose. The right one for you depends on your circumstances and goals. One of the main factors to consider is how long you are planning on having the property, how much capital you are willing to put down and whether you need rent to cover your outgoings.

How much deposit do I need for an investment property?

The total deposit you need will depend on the lender and the value of the property. You typically need a 20% deposit to avoid paying lenders mortgage insurance (LMI). It is possible to use equity you have in another property to form part of the deposit. 

You can calculate how much lenders may loan you using this borrowing power calculator.

Your Loan Market broker can crunch the numbers for you to determine your borrowing power and what your repayments could look like. A broker on your side can help set up your investment property for success.

Your next step

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Make it happen

Let us know what your goals are and we will connect you with a Loan Market broker directly.

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Find out how much you may be able to borrow to purchase property.

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