Investment Property Home Loan Rates From 5.69%

What is an investment home loan?

Investment home loans are for people who want to buy a property to rent out instead of live in. These products are generally distinct from 'owner occupier' home loans, and often have higher interest rates and stricter eligibility criteria. Most lenders offer both, although some smaller outfits only have one or the other available.

Property is a popular long term investment - many consider it a safer bet than other growth assets like shares. In Australia, it can be particularly attractive because of the tax breaks available to property investors.

Investment home loan rates in 2025

Investment home loan rates tend to fluctuate in tune with the RBA cash rate. In April 2022, when the cash rate was at the all time low of 0.10%, the average rate on new investment home loans (principal and interest) was about 2.7% p.a according to the RBA. As the cash rate increased, so too did investment home loan rates. Once rates started going down in 2025, investment rates followed suit.

Compare Investment Home Loans

By comparing various lenders and mortgage products, as well as understanding eligibility requirements, a property investor can ensure they find a home loan with all the features they need AND a competitive interest rate.

These are some of the major factors a prospective investor should consider when shopping for a new home loan:

Best investment home loan interest rates

Perhaps the most obvious factor a would-be borrower should consider is a home loan’s interest rate. Even a small change in an investor’s home loan interest rate – for example just 50 basis points – can have a big impact on overall returns.

30-Year Investment Home Loan: 6.50% p.a. vs 7.00% p.a.

Calculations made using Savings.com.au's Home Loan Comparison Calculator.

It’s also important to consider whether a fixed or variable rate is more suitable to an individual’s risk tolerance and market expectations.

Finally, mortgage lenders must provide a comparison rate, which factors in both the interest owed on a home loan product and any additional costs or fees charged to a borrower. Comparing one product’s comparison rate against another's can be a solid way to identify which offers more bang for buck.

Loan features

Loan features like unlimited extra repayments, redraw facilities, and offset accounts can significantly influence the success of a person’s property investment journey. If any of the preceding terms are unfamiliar to you, we’d recommend reading up on them as soon as possible because each can help lower the overall cost of the loan.

Fees and charges

It’s important to be aware of all associated fees, such as application fees, ongoing service fees, and early repayment fees.

And don’t forget, some loans might have lower interest rates but higher fees, which could affect the total cost - this is where the comparison rate comes in handy.

P&I repayments or interest only

Investment property loans can have either principal and interest (P&I) or interest-only (IO) repayments. Knowing which is more suited to you depends on your investment strategy.

Many property investors choose to make IO repayments, as they might be aiming to capitalise on the eventual sale of their property and don’t value paying down their debt in the meantime.

On the other hand, another investor might wish to pay off their investment mortgage entirely, so to eventually stop the flow of regular repayments.

Investment home loans in Australia

Property investing is big business in Australia. Over the three months to March 2025, $32.4 billion of the total $85.6 billion worth of home loans written were for investing (nearly 38%).

Investment home loan vs Owner occupier home loans

There are usually a few differences between investment and owner occupier home loans:

Specific interest rates, eligibility requirements, and product features will vary between lenders, with some likely to offer property investors far better deals than others.

Why do investment home loans have higher rates than owner-occupier mortgages?

Investment home loans generally have higher interest rates than owner occupier mortgages because lenders generally consider investment loans a bit riskier. The default rate (borrowers who can no longer make their repayments) tends to be higher on investment loans, which makes sense when you think about it - most people will fight harder to hold on to their home than they would an investment.

Investors also often rely on rental income to pay some or all of the mortgage repayments related to their investment properties. This income can be considered less stable than other forms of income (salary for example), as tenant turnover can lead to periods wherein a property is unoccupied.

For similar reasons, many banks and lenders require a larger deposit from investors to secure a mortgage.

What tax benefits are there for property investors?

The favourable tax environment for property investors is one reason why property investing is common in Australia. For instance, investors with negatively geared properties can deduct their annual losses against their taxable income.

Basically, investors earn an income from rent, but also have a bunch of expenses involved with running a rental property. Interest on the investment home loan is typically the largest, but there can also be landlord insurance, land tax, property manager or body corp fees, the list goes on. As these expenses are used to generate income, they are generally all tax deductible.

If a property generates more rental income than the sum of all these costs, it’s ‘positively geared’. When interest and other expenses exceed rental income, the property is ‘negatively geared’ and in Australia, this deficit can be offset against the owner's other taxable income.