Property Investment Loans

Leading for Investment Properties

Loans available for investment properties are generally similar to those available for owner occupied properties – that is, features, interest rates, options and flexibility between either are, in most instances, the same.

The key to determining which loan is best for your investment property comes down to your investment strategy, and as with any large financial decision you make, it’s always wise to seek advice from a professional before entering into any property investment.

Your Vie Financial broker can assist you and advise upon the most suitable financial facility structure to suit your investment strategy and goals.

Types of Property Investment Loans

At Vie Financial we acknowledge all the different types of development finance. We believe anything that involves investing requires careful consideration of all options when applying for a loan. Here are some definitions of loans we can walk you through that may suit you:

Package Home Loans

Package loans bundle standard fixed, variable, or split rate loans with other products, such as personal loans, insurance, credit cards, or transaction accounts. Despite having an annual fee, these types of home loans often offer lower interest rates.

SMSF Loans

SMSF (self-managed super fund) loans are necessary when buying properties as SMSF investments. They have more complex structures and documentation than traditional home loans, and they often offer limited recourse’ for lenders in the event of a default.

Low Doc Loans

If you’re self-employed or a full-time property investor, you may have a more difficult time proving your income. While they often have higher interest rates and fees as well as lower maximum LVRs, low doc loans require less documentation and are designed for borrowers just like you.

Bad Credit Loans

Does your credit have a few bad marks? If so, you may still qualify for a bad credit home loan. Although they often come with higher interest rates and more restrictions, bad credit home loans are offered by many lenders for individuals with a less than stellar credit history.

Bridge Home Loans

These are short-term loans designed to allow investors to purchase property while an existing property is sold.

Interest-only Loans

An interest only loan can minimise your expenses, boost your cash flow, and make sense in certain investing situations.

Line of Credit Equity Loans

A line of credit equity loans allows you to use your home’s equity to fund an investment.

Construction Loans

As its name suggests, a construction loan can be used to construct an investment property. These types of loans are structured to be paid off in stages.

Comparing Property Investment Loans in Australia

When comparing property investment loans, you should consider the following factors:

  • Eligibility – Not all home loans are available for investment properties, and some have square meter limits or are only available for certain property types, such as city apartment buildings.
  • Rates – Rates have a significant impact on loan repayment amounts, so make sure to compare the fixed and variable loan rates of several lenders when deciding on the right one for you.
  • Fees – Fees aren’t always a bad thing. For example, an annual fee may be reasonable if it allows for flexible loan terms. That being said, when comparing property investment loans and lenders, there are several fees to consider and examine, including application fees, valuation fees, monthly fees, legal fees, and fees for redraw facilities and offset accounts.
  • Investor Benefits – Certain loan features, such as interest-only or interest in advance options, can maximise cash flow and tax benefits.
  • Features – Some loan features, such as a redraw facility, can be beneficial for certain property investors, so it’s crucial to compare loan features along with rates, fees, and so on.

Investment Property Loans FAQ

How do property investment loans differ from traditional home loans?

Lenders view property investment loans as higher risk than traditional home loans. Therefore, they often have higher interest rates and stricter borrowing limits and lending requirements.

What are my home loan options?

There are several home loan options available to people throughout Australia and Tasmania, such as:
  • Fixed-rate loans
  • Variable-rate loans
  • Split-rate loans
  • Low-doc loans
  • Low-deposit loans
  • No-deposit loans
  • Professional or packaged loans
  • Parental guarantee home loans and more!

Do property investment loans require a deposit?

In most cases, yes. After the GFC, 100 per cent loans have largely disappeared from the market, so a minimum deposit of at least five per cent is often required.

Do I need to pay capital gains tax if I sell an investment property?

Yes, unless you purchased your property before September 20, 1985. You are also exempt from property gains taxes if it failed to generate profit or sold for a loss.

A 50 per cent discount is also available if you hold onto a property for longer than 12 months, but your accountant can better explain the tax implications of property investment.

For more information on how our team at Vie Financial can assist you with acquiring funding for your next investment please contact us below to speak with one of our brokers.