An investment property home loans offers individuals the ability to borrow funds from a lender to purchase a property for the purpose of investment.

Unlike a regular home loan, investment home loans provide borrowers with funds to use towards the purchase of a property that will be used for tenancy instead of as a primary residence. To apply for an investment home loan, applicants will need to provide evidence that they wish to use the purchased property as an investment.

Investment property home loans are designed for both new investors who are looking to purchase their first investment property, as well as seasoned investors who are looking to add to an existing portfolio.

Lenders of investment home loans generally favour borrowers who demonstrate strong financial stability and ability to repay the loan. Having a consistent source of income, considerable savings, and a low debt-to-income ratio will provide more security to lenders, who in turn may offer more flexible loan terms.

An experienced property investor with a track record of successful investments also signals to lenders an ability to repay the loan.

Features of Investment Property Home Loans

  • Higher interest rates – Investment home loans generally have higher interest rates compared to regular home loans due to the increased risk for lenders.
  • Interest-only investment loans – Some lenders offer borrowers the option of only repaying the cost of interest for a specified period, which can reduce the upfront cost of the loan.
  • Higher deposit requirement – Most investment home loan options will require a minimum of 20% deposit, resulting in a stricter loan-to-value ratio.

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