Lender

Variable
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GREAT INTEREST RATE
  • Option to add an offset for 0.10%
  • No monthly or ongoing fees
  • Unlimited redraws
GREAT INTEREST RATE

Smart Booster Investor Bundle (Principal and Interest)

  • Option to add an offset for 0.10%
  • No monthly or ongoing fees
  • Unlimited redraws
Variable
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NO UPFRONT OR ONGOING FEES
  • No upfront or ongoing fees
  • 100% full offset account
  • Unlimited extra repayments
NO UPFRONT OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Investment) (LVR < 80%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Unlimited extra repayments
Variable
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BUNDLE YOUR HOME LOAN AND YOUR INVESTMENT LOAN FOR MORE SAVINGS
  • No upfront or ongoing fees
  • 100% full offset account
  • Unlimited extra repayments
BUNDLE YOUR HOME LOAN AND YOUR INVESTMENT LOAN FOR MORE SAVINGS

Yard Investor Bundle Loan (Bundled with Home Loan)

  • No upfront or ongoing fees
  • 100% full offset account
  • Unlimited extra repayments
Variable
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REFINANCE ONLY
  • A low-rate variable investment home loan from a 100% online lender. Backed by the Commonwealth Bank.
REFINANCE ONLY

Variable Rate Investment Loan – Refinance Only

  • A low-rate variable investment home loan from a 100% online lender. Backed by the Commonwealth Bank.
Variable
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FREE REDRAW FACILITY
  • Pay more to reduce the amount of interest you pay
  • Easily access additional funds in your redraw
  • Great rates and low fees
FREE REDRAW FACILITY

Basic Investment Loan (Principal and Interest) (LVR < 60%)

  • Pay more to reduce the amount of interest you pay
  • Easily access additional funds in your redraw
  • Great rates and low fees
Variable
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100% FULL OFFSET ACCOUNT
  • Free redraw facility
  • Split account option
  • Unlimited extra repayments
100% FULL OFFSET ACCOUNT

Ocean Investment (Amounts < $1m, LVR < 60%)

  • Free redraw facility
  • Split account option
  • Unlimited extra repayments
Variable
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FAST TURNAROUND TIMES AND FLEXIBLE LOAN OPTIONS
FAST TURNAROUND TIMES AND FLEXIBLE LOAN OPTIONS

Basic Investment Loan (Principal and Interest) (LVR 60%-70%)

    Variable
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    Budget Investment Loan (Principal and Interest) (LVR ≤ 80%)

      Variable
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      Ocean Investment (Amounts < $1m, LVR < 70%)

        Variable
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        GET A FULL OFFSET ACCOUNT FOR NO EXTRA COST
        • No upfront or ongoing fees
        • 100% full offset account
        • Extra repayments + redraw services
        GET A FULL OFFSET ACCOUNT FOR NO EXTRA COST

        Low Rate Home Loan - Prime (Principal and Interest) (Investment) (LVR < 60%)

        • No upfront or ongoing fees
        • 100% full offset account
        • Extra repayments + redraw services
        Variable
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        UNLIMITED EXTRA REPAYMENTS
        UNLIMITED EXTRA REPAYMENTS

        Budget Investment Loan (Principal and Interest) (LVR 80%-90%)

          Variable
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          Yard Investment Loan (Principal and Interest) (LVR > 80%)

            Variable
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            Basic Investment Loan (Principal and Interest) (LVR 70%-80%)

              Variable
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              Ocean SMSF (No Offset) (Metro) (Principal and Interest) (LVR < 60%)

                Variable
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                Base Variable Investment Loan Special Offer (Principal and Interest) (LVR > 80%)

                  Variable
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                  Extra Investment Loan (Principal and Interest) (LVR 80%-90%)

                    Variable
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                    Standard Variable Investment Loan (Principal and Interest) (LVR < 80%)

                      Variable
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                      Base Variable Investment Loan (Principal and Interest)

                        Variable
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                        Ocean SMSF (With Offset) (Metro) (Principal and Interest) (LVR 60%-65%)

                          Variable
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                          SELF MANAGED SUPER FUND LOAN
                          • Easy refinance process
                          • No application fee and no settlement fee
                          • No monthly, annual or ongoing fees
                          SELF MANAGED SUPER FUND LOAN

                          SMSF 80

                          • Easy refinance process
                          • No application fee and no settlement fee
                          • No monthly, annual or ongoing fees

                          Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of June 26, 2022. View disclaimer.

                          Comparing investment property loan providers 

                          In these tables, we’ve compared home loans from:

                          • Australia's big four banks 
                          • A range of customer-owned banks 
                          • Non-bank lenders

                          Big four investment home loan interest rates

                          The big four banks, ANZCommonwealth BankNAB and Westpac, dominate the home loan market holding around 80% of all residential mortgages. In terms of investment mortgages, the big four hold about 84% of the total investment loan books of all registered authorised deposit-taking institutions (ADIs) according to prudential financial regulator APRA. In total, nearly $500 billion of the big four’s $1.4 trillion in housing loans is dedicated to investment lending. 

                          The tide however seems to be turning with a push against banking with the big four, particularly when it comes to home loans. The main argument for this lies in the fact that the interest rates offered by the big four are in some cases higher than those from smaller institutions.

                          These loans may also require an LVR of at least 80%, meaning they require an initial deposit of 20%. Borrowers who can’t afford a deposit of this size may not qualify for these home loan rates. 

                          Customer-owned investment home loan interest rates

                          Customer-owned banks, also called mutual banks, are banks that aren’t run for profit like traditional retail banks. Representatives of customer-owned banks state that profits are passed on to members in the form of lower rates, lower fees and better features and services. The mutual sector held combined assets of $148.3 billion in 2021, according to data published by KPMG. This is about 2.8% of total assets across all deposit-taking institutions, continuing an upward year-on-year trend. 

                          Non-bank investment home loan interest rates 

                          Retail banks and customer-owned banks are classed as ‘authorised deposit-taking institutions’ capable of offering deposit accounts like savings accounts and term deposits. While non-banks cannot accept deposits, they can still offer competitive rate home loans. 

                          How much difference can a low interest rate make? 

                          When it comes to total interest costs over the life of a loan, a low interest rate can make the world of difference on your back pocket.

                          Let’s compare two interest rates: a fairly low 2.50% p.a and 3.50% p.a.

                          That 3.50% p.a. might seem high compared to the low rates in these tables, but the reality is many people are still paying even more than this and aren’t aware of how much they could be saving. 

                          The table below shows the difference in interest costs between those two interest rates over the course of a 30-year, principal and interest loan. 

                          Loan amount Monthly cost:2.50% p.a  Monthly cost: 3.50% p.a  Monthly savings at 2.50% Total savings at 2.50%
                          $300,000 $1,185.36 $1,347.13 $161.77 $58,238.52
                          $400,000 $1,580.48 $1,796.18 $215.7 $77,649.22
                          $500,000 $1,975.60 $2,245.22 $269.62 $97,062.85
                          $700,000 $2,765.85 $3,143.31 $377.46 $135,889.13

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

                          Based on these calculations, that 1.00% difference - which is a fairly significant - can result in you paying over $100,000 less in interest over the life of the loan.

                          What to consider when looking for an investment home loan?

                          Finding a good home loan isn’t too tricky thanks to the wealth of information at your fingerprints, but you should still take a fair amount of time to compare a number of them by asking the following questions: 

                          • Is there an introductory rate? Many ‘low rate’ loans actually have introductory rates with higher revert rates. 
                          • If it’s a fixed rate, what’s the break cost? Refinancing from a fixed rate home loan can be expensive, so check the fees on the loan before committing. 
                          • What are the fees? A low advertised rate can have a high comparison rate, due to high ongoing and upfront fees.
                          • Can you make extra or more frequent repayments? Having the flexibility to do this could help you save thousands more over the life of the loan.
                          • Is it interest-only? Interest-only loans can be much cheaper to start with, but once the interest-only period ends repayments can skyrocket. 

                          The know-hows of investment property loans

                          Borrowing to invest in property is big business in Australia, with investment home loans making up around one-third of the value of all home loan commitments each month according to ABS data.

                          An investment home loan is a home loan for people looking to buy a property with the intention of renting it out and profiting through a rise in the property’s value. Home loans for an investment property differ from home loans used to buy a house or unit to live in – known as ‘owner-occupier’ home loans. Compared to owner-occupier home loans, investment home loans often have higher interest rates and may have stricter eligibility requirements. Just like every major purchase, by researching prior and shopping around for the best rates, the potential is there  to save thousands over the life of your loan.  

                          How can you save money on an investment home loan?

                          Five key ways you can save on an investment home loan include:

                          Investment home loan interest rates

                          Investment home loans tend to come with higher interest rates. This is because property investors are generally considered to be riskier borrowers than owner-occupiers. It’s also because APRA recently had a growth cap imposed on the amount of investment lending that ADIs (Authorised Deposit-taking Institutions) could conduct, however, this cap was lifted in July 2018.

                          But if you spend the time to do some research – and you should if you’re taking out a home loan – you’ll see that there are still home loans out there for investors with rates below 4%.

                          Savings.com.au’s home loan repayment calculator shows that the difference between a 4% and 5% interest rate on a $500,000 home loan is nearly $300 per month and over $100,000 across a period of 30 years. In regards to savings, that difference speaks for itself.

                          Investment loan fees

                          Just like a regular home loan, investment loans have the potential to sting the back pocket with a range of fees if you aren’t careful. When comparing investment home loan options, there's more to consider than the face value of the advertised interest rate - it's important to consider the fees as well. 

                          These fees can include:

                          • Upfront fees - the fee charged for assessment and taking out the loan.
                          • Ongoing fees - charged by lenders for continuing to provide the loan. 
                          • Exit, break and discharge fees - fees charged when the loan ends or when you switch to another lender. 

                          Keep in mind that upfront and ongoing fees are factored into a loan’s comparison rate, which every law-abiding lender must display beside the advertised rates of their loan products. If you spot a loan with a low advertised interest rate yet with a relatively high comparison rate, the loan likely has high fees to make up for the lower interest rate.

                          Investment loan features

                          Home loan features such as offset accounts and redraw facilities can help borrowers save on their interest costs.

                          However, property investors may favour an offset account over a redraw facility as an offset account operates as a separate facility to the investment loan. This means that withdrawing funds from the offset account for personal use does not distort the loan’s purpose, maintaining the tax-deductible capabilities of the loan.

                          For example, using a redraw facility to withdraw $50,000 from a $500,000 investment home loan to renovate your owner-occupied home could result in the ATO deeming the investment loan to be only 90% tax-deductible. There is no risk of that with an offset account.

                          Home loans with offset accounts often have higher interest rates, so borrowers should consider their financial position before committing. 

                          Mortgage repayments

                          While monthly repayments might be the default option for the loan you are after, making repayments fortnightly or even weekly can help you save on interest and pay off the loan earlier. This is the case so long as the value of these regular repayments are at least half (fortnightly) or a quarter (weekly) of your monthly repayments.

                          How does tax work on investment properties? 

                          Unlike owner-occupied home loans, the interest component of investment home loans can be tax-deductible as an investment expense. For this reason, many investors choose to take out interest-only home loans since they can completely claim the cost of their repayments as a tax deduction for the first few years. 

                          If the expenses on your rental property, including the loan repayments, are greater than the income you earn from it then you can also claim negative gearing tax concessions. These allow you to offset this loss against your taxable income for that year. 

                          Consult a registered tax agent or the Australian Taxation Office (ATO) for more information on tax on your investment property. 

                          Tax benefits

                          The Australian Taxation Office (ATO) lists several investment expenses that investors can claim a tax deduction on, such as:

                          • Interest paid on the loan.
                          • Home, contents and landlord insurance.
                          • Maintenance and management costs.
                          • Council rates and construction costs.
                          • Property value depreciation.
                          • Travel expenses to the property in order to carry out inspections or maintenance.

                          When considering the tax implications of purchasing an investment property, you should consider speaking to a registered tax agent or tax professional regarding your individual financial circumstances. 

                          Frequently Asked Questions

                          Property investment has become an incredibly popular avenue for Australians seeking to grow their wealth portfolios. There is a range of benefits to property investment including:

                          • The ability to earn rental income with tenants renting out your property.
                          • Capital growth if you manage to nab a property at a good price and the property increases in value.
                          • Interest on investment home loans is tax-deductible.
                          • Property investment can be less volatile than other investment avenues including the share market and cryptocurrency.
                          • Unlike shares, investment property is a physical product that possesses physical value.

                          A popular way to buy an investment property is to use the equity in your existing home, meaning you don’t have to place any of your hard-earned cash towards a deposit. A simple rule of thumb is to multiply your useable equity by four to arrive at the maximum purchase price for an investment property.

                          If you choose to take out a home loan to fund an investment property, an important decision you’ll have to make is whether to take out a principal-and-interest (P&I) loan or an interest-only (IO) loan. From there, you can choose between fixed and variable interest rates.

                          More often than not, lenders offer variable rate packages with extra features allowing investors to make the most of their investments, including offset accounts. Offset accounts allow an investor to hold savings in a separate account which will be credited towards the overall loan balance. The best type of loan will ultimately be based on your current financial position.

                          If you seek certainty about outgoing costs and want to make their budgeting as easy as possible, fixed-rate loans are the way to go. If you crave more flexibility yet remain aware as to how cash flow levels can be affected by interest rate rises or falls, variable rate loans are for you.

                          Qualifying for an investment property is much like qualifying for a traditional home. If you have enough money to purchase the property in cash, then you’ve done incredibly well! If not, one of the first steps to buying an investment property is getting approved for an investment loan, which means coming up with a deposit.

                          Lending rules are stricter for investment loans, and you’ll generally need a bigger deposit of at least 20% or more of the property’s value as it makes you eligible for most investment loans. Investors may also need to prove they will earn enough income from their employment to cover the cost of repayments. However, lenders generally won’t take into account the rental income you hope to receive on the property as you still need to be able to afford the loan if the property is untenanted.

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