Investment Property Loans

For a $500,000 property, the standard deposit is 20%, which equals $100,000. However, you can potentially secure an investment property loans with a smaller deposit, depending on your circumstances and lender criteria. For example:

10% Deposit: Some lenders allow you to secure the loan with a 10% deposit ($50,000) if you pay LMI.




20% Deposit (No LMI): Traditional lenders prefer a 20% deposit to avoid paying Lender’s Mortgage Insurance (LMI).




5% Deposit: In some cases, you can buy an investment property with a 5% deposit ($25,000), but this typically requires strong financials, higher interest rates, and mandatory LMI.

If you have access to equity in another property or government incentives, it can help bridge the deposit gap. Consulting with mortgage specialists experienced in investment property loans is crucial to understanding the options available to you.

Yes, it is possible to buy an investment property with a 5% deposit, but it comes with certain conditions:

1. Lender’s Mortgage Insurance (LMI): Lenders will require you to pay LMI to protect them against risks, as a 5% deposit is considered high-risk.

2. Higher Interest Rates: You may face slightly higher interest rates on investment property loans due to the low deposit.

3. Income Requirements: You’ll need to demonstrate strong income and financial stability to convince the lender of your borrowing capacity.

4. Equity Support: If you already own a property, you may leverage your home equity as part of the deposit.

While a 5% deposit can make entering the property market quicker, working with a mortgage broker can help tailor solutions and identify lenders that offer investment property loans suitable for low-deposit investors.

if you’re exploring options to secure an investment property loan, reach out to Blueprint Financial Services Trusted Mortgage broker in sydney for tailored advice.

A good ratio for an investment property typically refers to the rental yield or the debt-to-income (DTI) ratio, which are essential indicators for property investors.

1.Rental Yield

• A strong rental yield is generally 5-7% or higher. This means the annual rental income divided by the property value should ideally fall within this range to ensure the property generates good returns.




• High-yield properties can help offset loan repayments on investment property loans, making the investment more sustainable

2. Debt-to-Income (DTI) Ratio

• Lenders often look at your DTI ratio to determine borrowing eligibility. A healthy DTI ratio is usually below 30-35%, ensuring you can service the loan without financial strain.

3. Loan-to-Value Ratio (LVR)

• A good LVR is typically 80% or lower, as this minimizes risk and avoids Lender’s Mortgage Insurance (LMI). If you’re using investment property loans with a higher LVR (90-95%), ensure the rental income supports repayments.

Understanding these ratios allows you to assess the financial viability of a property while maximizing the benefits of investment property loans. Speak to a mortgage specialist to find tailored loan solutions that align with your investment goals.

The best loan term for an investment property depends on your financial goals. Many investors prefer a 30-year loan term for lower monthly repayments and better cash flow management. With flexible investment property loans, you can also opt for interest-only periods to reduce immediate costs and focus on maximizing rental income.

Yes, it is possible to secure a lower interest rate on investment property loans. To achieve this, ensure you have a strong credit score, a solid deposit (20% or more), and a favorable loan-to-value ratio (LVR). Working with a mortgage broker can also help you compare lenders to find the most competitive rates.