Investment mortgage broker for investment loans
Sliding into your second property? Adding to your self-managed fund? Looking at your cash flow or capital growth? Whatever your next step, we're here to take out the hurdles. As your dedicated investment mortgage broker on the Sunshine Coast, Mason Finance Group helps investors like you navigate the lending landscape, compare home loan options from over 60 lenders across Australia, and secure the right investment loan for your financial goals.
The process
Whether it's your first investment property or you've done this before, familiarise yourself with the ins and outs of investment borrowing.
- Say hello
It all starts with taking about one minute to answer a few simple questions right here. After that, we’ll meet to discuss your goals, in person or online. - The hunt begins
To find the most suitable lenders, we’ll discuss your options and borrowing power. An existing property can be used as equity, which means you may not need as much of a deposit as you first thought. - Down to business
Found a lender? Great stuff. We’ll do the paperwork to package, sign and lodge your documents. - The go-ahead
Once pre-approved, your borrowing power will be revealed. Now you can make an offer on your next investment. - The hard yards
You’ve made your move and have just secured a property; all that’s left is the paperwork, which you can leave to us. We will work overtime to ensure your property is accepted by the bank. Grab a sharpie, because a settlement date will then be set in place. - It doesn't get bigger than this
It’s settlement time! We’ll coordinate with your solicitor or conveyancer and the lender, in line with the date on the contract. Once the settlement takes place, pop the champagne because you’ve just won the property game.
What is an investment home loan?
An investment home loan is a loan designed for borrowers who are buying a property they don't plan to live in - typically to earn rental income, benefit from capital growth, or both. While an investment loan works similarly to a standard home loan, there are some key differences investors need to be aware of. Interest rates on investment property loans are generally slightly higher than owner-occupier home loan rates, and the lending criteria can be more rigorous depending on the bank or lender you apply with.
That's where having a broker in your corner makes all the difference. At Mason Finance Group, we compare investment home loan products from a wide panel of Australian banks and lenders to find the loan that suits your investment strategy - whether you're a new investor buying your first investment property or a seasoned investor building a larger portfolio. We provide personal guidance through the entire lending process, helping you borrow with confidence and manage your repayments from day one.
Investment loan types and features
There are several home loan types available to you - variable rates, fixed rates, interest-only options, guarantor loans and more. Understanding the different loan types is essential for any investor, because the right loan structure can have a big impact on your repayments, cash flow, and long-term financial position. Scroll through some of the options below to get a better understanding of what the differences are. We’re here to answer your questions when you’re ready.
Variable-rate home loan
As the name suggests, the interest rate can change over the life of the loan. A variable rate gives you flexibility, but can also leave you open to interest rate rises. These home loans typically offer features like unlimited additional repayments, redraw facilities, and offset accounts - all of which can help you manage your investment property costs over the years. Many investors choose a variable rate loan because it allows them to pay off the loan faster when they have funds available, and the offset account can provide meaningful savings on loan interest over time.
Fixed-rate home loan
This is the opposite of a variable-rate loan. Your interest rate and repayments will stay the same during the fixed rate period, no matter what. So no surprises. A fixed-rate home loan can be a smart choice for investors who need certainty over their repayments for a set number of years - particularly when interest rates are expected to rise. Keep in mind that fixed-rate loans may include break costs if you pay off the loan early, and most lenders limit additional repayments during the fixed period.
Split loan
You’re able to fix part of your loan while leaving the rest on a variable rate. This gives you the best of both worlds - the certainty of a fixed rate combined with the flexibility of a variable rate home loan. It’s a popular option for investors who want to manage risk while still being able to make extra repayments on the variable portion.
Packaged home loan
Professional packages offer a discount on standard variable and fixed rates, the waiving of fees, and, in some cases, great deals on other products from the same bank or lender. A packaged loan usually comes with one annual fee for the bundled products. For investors with multiple properties, a packaged home loan can include benefits like credit card fee waivers, insurance discounts, and reduced interest rates across your lending.
Introductory rate loan
Also known as ‘honeymoon’ loans, these offer a low interest rate for a short introductory period (e.g. one to two years), after which the rate moves to the standard variable rate. It’s worth looking at the comparison rate to understand the true cost of the loan over the full term. While the initial savings can be attractive, investors need to consider what the repayments will look like once the introductory period ends.
Interest-only loan
As the name suggests, you only pay the interest on the principal balance for a set period, with the principal balance unchanged. Interest-only repayments are popular with property investors who want to keep their cash flow flexible - especially if the investment property is negatively geared. During the interest-only period, your repayments will be lower, but keep in mind that once this period ends, your repayments will increase as you begin paying down principal and interest. Over the full loan term, you’ll pay more in total loan interest compared to a principal interest loan from the start.
Guarantor home loan
A guarantor uses the equity they’ve built up in an existing property to help you purchase your investment property sooner. Guarantors could be your parents, parent-in-law, step-parent or grandparents. This option can reduce the deposit you need and may help you avoid paying Lenders Mortgage Insurance (LMI), potentially saving you thousands on upfront costs.
Understanding comparison rates in investment loans
When you're comparing investment home loan options, the interest rate alone doesn't tell the whole story. A comparison rate takes into account both the interest rate and most of the fees and costs associated with the loan, giving you a more accurate picture of the true cost of borrowing.
Different banks and lenders structure their fees differently - some may offer a lower interest rate but charge higher ongoing fees, while others include costs in a slightly higher rate. Comparing the comparison rate across different home loan products helps every investor make a more informed decision and avoid unexpected costs down the track. This is especially important for investment property loans, where even a small difference in the comparison rate can add up to significant savings over 25 or 30 years.
We'll walk you through the numbers so you can see exactly what each loan option will cost you - and how different interest rate and fee structures compare across lenders.
Key considerations when borrowing to invest
Buying an investment property is one of the biggest financial decisions you can make. Before you apply for an investment loan, here are a few things worth considering.
Your borrowing capacity. How much you can borrow depends on your income, existing debts, living expenses, and the rental income the property is expected to generate. Every bank and lender assesses this differently, which is why working with a broker gives you access to a wider view of what's possible. We provide tailored lending advice based on your personal financial situation.
Upfront and ongoing costs. Beyond the purchase price, you'll need to factor in stamp duty, legal fees, building and pest inspections, landlord insurance, and ongoing property management costs. Some of these costs can be significant, so it pays to plan your savings and budget.
Loan-to-Value Ratio (LVR). Most banks will lend up to 80% of the property's value without requiring Lenders Mortgage Insurance. If you're looking to borrow above 80% LVR, additional costs and eligibility criteria may apply. Understanding your LVR is essential for working out how much deposit you need and whether you're eligible for the loan products that offer the best interest rates.
Interest rates and fees. Investment property interest rates are typically higher than owner-occupier home loan rates. Compare the interest rate alongside the fees - including application fees, ongoing account fees, and any exit fees - to understand the total cost of the loan. Don't forget to check the comparison rate for a clearer picture.
Your investment strategy. Whether you're buying for rental yield, long-term capital growth, or both will influence the type of loan you choose, the property you target, and how you structure your repayments. Some investors prefer interest-only repayments to manage cash flow in the early years, while others opt for principal interest repayments to build equity faster.
The property itself. The type of investment property - whether it's a house, unit, or something new - can affect the lending options available to you. Some lenders have restrictions on certain property types or minimum value requirements, so it's important to consider this before you commit. Rural properties, small apartments, and properties purchased off the plan may have different LVR limits or lending criteria.
Your risk tolerance. All investment carries risk. Property values can fall, interest rates may rise, and rental periods may include vacancies. Having a financial buffer and understanding the risks before you borrow is essential for any investor.
Investment strategies
Let's make the complicated, uncomplicated. An investment strategy is just the way you want to invest your money. Still not crystal clear?
Rentvesting
The freedom of renting meets the stability of owning. 'Rentvesting' is a popular strategy for new investors. Basically, you're investing while you rent. Stay in the suburb you want, while owning an investment property somewhere else. It's a way to get into the property market without needing to purchase in an area you can't afford to live in.
Use your home to buy another
If you already have a home, you can use its equity to top up your deposit. Don't forget, equity is not free money. When you access your equity, your loan balance will increase, and so will your repayments. We'll help you calculate how much equity you have available and whether this approach makes financial sense for your personal situation.
Positive and negative gearing
What's the difference between the two, and which is right for your investment property?
Positive gearing is when your total rental income is MORE than the cost of owning and managing the investment property (loan repayments, interest, maintenance, management fees, insurance, etc.). To put it simply, your property props up your finances.
Negative gearing is the opposite. It's when your total rental income is LESS than the cost of owning and managing the investment property, leaving you to pay the difference.
Positive gearing allows you to have an increased income and generally won't put you out of pocket. However, you will be taxed on any additional funds from your investment.
With negative gearing, you can claim tax deductions on expenses related to owning your investment property. The capital growth on the property will also eventually outweigh the expenses as the property grows in value over time.
As the names suggest, there are pros and cons for both situations, so it's important to get the right financial advice on which one is better suited to you. We can connect you with qualified financial professionals who can help you manage your tax and investment strategy.
Calculators
In the realm of financial empowerment and planning, knowledge is your greatest ally. Use these calculators to get an idea of how much you can borrow and how much your repayments might be.
FAQs about investment loans.
We’ve got your questions covered.
What specific factors should investors consider when selecting an investment loan?
There's no one-size-fits-all investment loan, so it's important to consider what matters most to your situation. Key factors include the interest rate and comparison rate, whether you want a fixed rate or variable rate, the loan terms, and the fees involved - both upfront and ongoing. You should also look at features like offset accounts, redraw facilities, and whether you're eligible for a discount based on your LVR or loan amount. Some investors need the flexibility of interest-only repayments in the early years, while others prefer to pay principal interest from the start. Your overall financial position and investment strategy should guide your decision, and we can help you weigh up each of these factors across different banks and lenders.
How do different types of investment loans differ in terms of fees and repayment options?
The main types of investment home loans - variable rate, fixed rate, split, and interest-only - each come with different fee structures and repayment options. Variable-rate home loans tend to offer the most flexibility, with features like offset accounts, redraw, and unlimited additional repayments, but the interest rate can move up or down. Fixed-rate loans lock in your repayments for a set period of years, offering certainty, though they may include restrictions on extra repayments and break costs if you exit early. Interest-only loans reduce your repayments during the interest-only period, but over the life of the loan, you'll pay more in total interest because the principal balance isn't being reduced. Packaged home loans can offer a discount on your interest rate and waive certain fees in exchange for an annual account fee. We'll help you understand the total cost of each option so you can choose with confidence.
What are the risks associated with borrowing to invest in property?
Borrowing to invest always carries risk, and it's not a strategy that suits every investor. Property values can fall as well as rise, and there's no guarantee your investment property will deliver the returns you expect. Interest rates may increase over the years, which would push up your repayments. If you experience a period without tenants, you'll need to cover the loan repayments yourself. There's also the risk that your personal financial circumstances could change - for example, a change in employment or an unexpected expense. It's important to have a financial buffer in your savings, consider landlord insurance, and seek advice from a qualified financial adviser before you borrow to invest. We always recommend customers stress-test their repayments at a higher interest rate to make sure borrowing is manageable even if rates rise.
How can an investor determine their borrowing capacity?
Your borrowing capacity is based on several factors, including your income (both employment income and any existing rental income), your living expenses, your existing debts and credit commitments, and the deposit or equity you have available. Each bank and lender calculates borrowing capacity differently, so what one lender offers may be quite different from what another. A good starting point is to use ourborrowing power calculator, and from there, we can provide a more accurate picture based on your specific situation and the lending criteria of different Australian lenders. We'll also factor in the property type, your LVR, and any margin requirements the bank may apply to rental income.
What documents are typically required for an investment loan application?
When you apply for an investment home loan, most banks and lenders will ask for proof of identity (such as your driver's licence and passport), recent payslips or proof of income, tax returns and notices of assessment, bank statements showing your savings and spending habits, details of any existing debts or loans, and information about the property you're looking to purchase. If you're self-employed or run a business, you may need to provide additional financial statements. We'll give you a clear checklist upfront so there are no surprises during the application process - and we'll manage the paperwork with your chosen lender to keep things moving.
What fees should I be aware of when purchasing an investment property?
There are several fees and costs that often aren't discussed in length when buying a property. These include stamp duty, pest and building inspections, mortgage registration and transfer fees, conveyancing or legal fees, and landlord insurance. You may also need to pay Lenders Mortgage Insurance if your LVR is above 80%, and some lenders charge application fees, valuation fees, or ongoing account fees. Get in touch with us today for an upfront conversation about all the costs involved so you can budget with confidence.
Can I use equity to buy an investment property?
Absolutely! If you already own a home, you can use the equity you've built up to purchase an investment property without needing to dip into your savings for a full deposit. This equity can be used for various purposes, such as covering the deposit on a new purchase, funding renovations, or setting up a line of credit. We'll help you understand how much equity you have available, what you're eligible to borrow, and whether this is the right lending approach for your financial goals.
How do I choose the right kind of investment loan?
The ideal investment home loan should maximise your goals for cash flow and capital growth. One of the first considerations is whether a fixed rate or variable rate suits your needs - and whether an interest-only or principal interest repayment structure is right for you. Different lenders and banks also offer different home loan features, fees, and interest rates, so comparing your options is essential. We can help you understand all the different options available, find the right loan with the right features from our panel of over 60 lenders, and save you both time and money in the process.
Request a Free Consultation
Ready to take the next step with your investment property? Whether you're buying your first investment, refinancing an existing investment home loan, or looking to expand your portfolio, Mason Finance Group is here to help. We'll compare home loan options from over 60 Australian banks and lenders to find the right loan for your needs. Apply online, call us on 07 5211 0099, or book a free consultation today.