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LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.29% p.a.
6.20% p.a.
$2,473
Principal & Interest
Variable
$0
$0
80%
Featured Apply In Minutes
  • A low-rate variable investment home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.19% p.a.
6.58% p.a.
$2,589
Principal & Interest
Variable
$0
$530
90%
Featured 90% LVR
  • You MUST already have Solar or a documented plan to install within 90 days to be eligible for this loan
  • Available for refinance or purchase
  • No monthly, annual or ongoing fees
6.34% p.a.
6.36% p.a.
$2,486
Principal & Interest
Variable
$0
$250
60%
Featured Unlimited Redraws
  • No annual fees – None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
  • Redraw freely – Access your additional payments when you need them
  • Home loan specialists available today
6.19% p.a.
6.62% p.a.
$2,447
Principal & Interest
Fixed
$390
$0
60%
6.24% p.a.
6.64% p.a.
$2,460
Principal & Interest
Fixed
$10
$150
80%
6.14% p.a.
6.15% p.a.
$2,434
Principal & Interest
Variable
$0
$180
80%
6.14% p.a.
6.27% p.a.
$2,434
Principal & Interest
Fixed
$0
$798
80%
6.14% p.a.
6.31% p.a.
$2,434
Principal & Interest
Fixed
$0
$600
95%
6.14% p.a.
6.28% p.a.
$2,434
Principal & Interest
Fixed
$0
$840
90%
6.29% p.a.
7.72% p.a.
$2,473
Principal & Interest
Fixed
$0
$595
95%
6.34% p.a.
6.34% p.a.
$2,486
Principal & Interest
Variable
$0
$0
50%
6.34% p.a.
6.36% p.a.
$2,486
Principal & Interest
Variable
$0
$350
60%
  • $0 application fee
  • Fast turnaround times
  • Estimate your borrowing power in as little as 1 minute
6.34% p.a.
6.59% p.a.
$2,486
Principal & Interest
Variable
$248
$350
70%
  • $0 application fee
  • Fast turnaround times
  • Estimate your borrowing power in as little as 1 minute
6.34% p.a.
6.40% p.a.
$2,486
Principal & Interest
Variable
$0
$799
80%
6.39% p.a.
6.41% p.a.
$2,499
Principal & Interest
Variable
$0
$250
80%
6.74% p.a.
7.07% p.a.
$2,592
Principal & Interest
Fixed
$8
$0
70%
6.74% p.a.
7.62% p.a.
$2,247
Interest-only
Fixed
$0
$160
80%
6.79% p.a.
9.22% p.a.
$2,605
Principal & Interest
Fixed
$8
$800
95%
7.09% p.a.
8.31% p.a.
$2,685
Principal & Interest
Fixed
$395
$0
90%
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Important Information and Comparison Rate Warning

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. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. 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 . View disclaimer.

What is an investment home loan?

An investment home loan is designed for people looking to buy a property with the intention of renting it out or profiting through a rise in the property’s value (or both!). Home loans for investment properties differ from home loans used to buy a property to live in, which are known as ‘owner-occupier’ home loans.

Investment home loans often come with higher interest rates than owner-occupier home loans and may have stricter eligibility requirements. Thus, it's arguably more important to thoroughly compare home loan products when looking to finance an investment property.

Borrowing to invest in property is big business in Australia. Nearly $104 billion worth of new loans were handed to property investors over the course of 2023, according to ABS data.

However, it appears most buyers simply turn to one of Australia’s four major banks to fund an investment property purchase. More than 72% of lending for investment properties was provided by the big four banks as of January 2024, APRA data reveals.

But the big banks don’t necessarily offer the best deals. Smaller institutions often offer lower interest rates on investment home loans, as the comparison table above may demonstrate.

By researching and shopping around for the best rates, an investor could save thousands over the life of their loan. 

If you’re considering a new loan for an investment property, or you’re looking to refinance your existing investment home loan, Savings.com.au can help you find some of the market’s lowest-rate investor home loans.

How to get a low-rate investment property loan

It's the question that most readers presumably want answered: How can a property investor secure a lower-rate mortgage product?

As the table below shows, what might be considered a small change in an investor’s home loan interest rate – even just 50 basis points – can have a big impact on their overall returns.

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

Loan amount

Monthly repayments: 6.50% p.a 

Monthly repayments: 7.00% p.a 

Monthly savings: 6.50% p.a. vs 7.00% p.a.

Savings over life of loan: 6.50% p.a. vs 7.00% p.a.

$300,000

$1,896.20

$1,995.91

$99.71

$35,887.31

$400,000

$2,528.27

$2,661.21

$132.94

$47,856.09

$500,000

$ 3,160.34

$3,326.51

$166.17

$59,824.79

$600,000

$3,792.41

$3,991.81

$199.40

$71,792.28

$700,000

$4,424.48

$ 4,657.12

$232.64

$83,751.71

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

Generally speaking, the lower the risk a borrower poses to a lender, the more favourable the interest rate they can snap up.

In many cases, a property investor can prove they’re financially reliable by maintaining a strong credit score, a stable income, and a low debt-to-income ratio.

They might also reduce the risk they represent to a lender by putting down a larger deposit. Typically, those that put down a deposit of at least 40% of a property’s value can secure some of the most competitive rates on the market.

Additionally, banks and lenders might view an investor buying property in an area with high rental demand, a stable rental market, or one that typically offers above-average rental yields more favourably than they would another investor purchasing in a less desirable location.

Ultimately, however, securing a lower rate investment home loan commonly comes down to shopping around.

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

How to compare investment home loans

At first glance, one home loan may seem indistinguishable from another. Yet, when a would-be borrower looks beyond the catchy slogans and promotional materials, they might discover a single product stands out from the mix.

Proper home loan comparison and a clear understanding of your individual needs is the key to distinguishing between superior and inferior home loan products.

What might be a perfect mortgage for one property investor might be a nightmare loan for another.

Here’s a breakdown of the major factors a prospective investor should consider when shopping for a new home loan:

Interest rates and comparison rates

Perhaps the most obvious factor a would-be borrower should consider is a home loan’s interest rate. A lower rate can lead to significant savings over both the short and long term.

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 surefire way to identify which of the two offers more bang for buck.

Loan features

Loan features like interest-only payments, the ability to make extra repayments, redraw facilities, and offset accounts, can significantly influence the success of a person’s property investment journey.

By understanding what the various features available are, why they matter, and how they can be best utilised, a borrower can compare home loan products confidently and effectively.

Fees and charges

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.

Repayment structures

It's important a property investor knows whether a loan offers principal and interest (P&I) repayments, interest-only (IO) repayments, or both.

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 property’s mortgage entirely, so to eventually stop the flow of regular repayments.

Knowing your investment strategy and choosing the mortgage product that suits it best could prove to be an invaluable first step on your property investment journey.

How do investment mortgages differ from owner-occupier home loans?

There are many things that differ between investment and owner-occupier home loans. The key variants include:

Criteria

Investment Home Loan

Owner-Occupier Home Loan

Interest Rate

Typically higher due to increased risk

Generally lower

Eligibility Requirements

May have stricter criteria due to the nature of the investment

Standard criteria, normally focused on the borrower's ability to pay

Loan-to-Value Ratio (LVR)

Often capped at 90%

Regularly up to 95%

Deposit Requirements

Higher deposit usually required (e.g., up to 10% or more of property value, with the potential for LMI)

Lower deposit possible (as low as 5% of property value with LMI)

Tax Implications

Possibility of tax benefits through negative gearing if expenses exceed rental income

Generally, no direct tax benefits; primary focus is homeownership

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?

Investor mortgages generally have higher interest rates than their owner-occupier counterparts, primarily because investment properties are typically considered riskier to lenders.

Investors 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, as tenant turnover can lead to periods wherein a property is unoccupied.

As of January 2024, the average interest rate for new investor loans was 6.54% p.a., compared to the average new owner-occupier loan rate of 6.27% p.a., according to Reserve Bank of Australia (RBA) data.

For similar risk-related reasons, many banks and lenders require a larger deposit from investors to secure a mortgage. While some lenders may allow an owner-occupier to borrow up to 95% of a home’s value, provided they pay Lenders Mortgage Insurance (LMI), investors may only be able to borrow with a Loan-to-Value Ratio (LVR) of up to 90% and might still face LMI on smaller deposits.

Can investor home loans provide tax benefits?

Considering investing in property and want to reduce your tax bill? You might be interested to learn about negative gearing.

Negative gearing is one of two forms of ‘gearing’; that is, to invest with borrowed money.

The ‘negative’ part comes into play when an investor spends more to own their investment than they make back in resulting income. In the case of property investment, that income is typically rent.

When a property investor pays more in interest and other costs than they receive in rental income, they might be able to offset the difference against their other income when it comes to tax time.

So, investment home loans can, indeed, provide tax benefits to some investors in certain circumstances.

Frequently Asked Questions

In Australia, the ‘big four' banks – CommBank, Westpac, ANZ, and NAB – dominate the banking landscape. Their extensive reach and brand recognition often make them go-to options for investment home loans. But that doesn’t necessarily mean they’re the best investment mortgage lenders.

The big four banks generally offer a range of investment home loan products. They typically provide numerous branch locations, extensive customer service, and diverse financial products. However, their interest rates for investment loans might not always be the most competitive in the market.

On the other hand, smaller banks, credit unions, and non-bank lenders often offer lower interest rates and more personalised service. They might also provide more flexible lending criteria and innovative loan products tailored to investors' specific needs.

The eligibility criteria for investment home loans generally differ from those for owner-occupier home loans due to the higher risk associated with investment properties.

Key eligibility criteria typically includes stable and sufficient income – enough to cover loan repayments and still allow for financial security. Some lenders may also factor in the rental income that will presumably come from an investment property.

A good credit history can also be essential in securing a loan with favorable terms, while lenders typically require a lower LVR for investment properties – usually not more than 80% to 90%. If a property investor has a deposit of less than 20%, they might also be required to pay Lenders Mortgage Insurance (LMI).

Lenders will generally also assess your existing debts against your income to ensure you can manage additional loan repayments, and many might restrict the property types or locations they fund. For instance, some lenders won’t fund the purchase of single bedroom units or properties in rural locations.

Property investment in Australia is often viewed as a lucrative endeavour. However, like any investment, it comes with its set of risks. Understanding these risks is crucial for any potential investor.

One of the primary risks involves market fluctuations. The value of properties can be highly sensitive to economic changes, interest rate shifts, and trends in the real estate market.

Another risk is tied to the stability of rental income. This income can be unpredictable due to factors like tenant turnover, vacancy periods, or tenants defaulting on rent.

Additionally, property investment is subject to interest rate risks, especially for those with variable rate loans.

Those are just some risks that can come with investing in real estate. Anyone considering doing so should weigh up their options carefully and seek out independent advice when needed.

Property investors can absolutely refinance their home loans.

Refinancing an investment home loan can offer several advantages, including lower interest rates, access to equity, and improved loan features.

Refinancing to a loan with a lower interest rate or more favourable features can make a notable difference to the size of an investor’s mortgage repayments and potentially save tens of thousands over the life of their loan.

Further, the equity that is built up in bricks and mortar is notoriously hard to access, but refinancing offers a means to utilise it - e.g. as a deposit on another investment property, to fund renovations, or to buy a car.

If you’re considering refinancing your investment home loan, check out some of the market’s best rates by browsing the comparison table above.