Compare top investment home loan rates
While property can be a worthwhile long-term investment option to consider – depending on your circumstances and financial goals – it can also require plenty of research, particularly at a time when property prices are sky-high in many parts of Australia. Research typically includes searching extensively for the right property, potentially finding the right builder to help with any necessary improvements, and of course, getting the right home loan if you need one to help fund your investment property venture.
What is an investment home loan?
An investment home loan is a type of home loan designed for borrowers who plan to use the property they purchase as a way to make money, rather than as a home for themselves. Investment home loans are similar in some ways to owner-occupier home loans, but there are a few key differences between them as well.
When you apply for a home loan in Australia, you’ll typically need to let your lender or broker know whether you intend to borrow as an owner-occupier or an investor, based on how you plan to use the property you’re looking to purchase.
How much is an investment home loan interest rate?
The interest rates on offer for property investors may be different to those borrowing for a home to live in, and can often be higher. This could be something to consider if you’re thinking of investing in property, and means it is important to do your research, compare your options and consider seeking professional financial advice before jumping in.
Outside of interest rates, buyers of investment properties in Australia generally have to contend with many of the same home loan fees and costs as owner-occupiers, which Moneysmart warns may include stamp duty, legal costs and real estate agent’s fees. Investors can sometimes end up paying more overall due to being ineligible for many of the lender-specific offers and government incentives that some owner-occupiers can access.
How do I compare investment home loans?
Much like finding the right investment property, finding the right investment home loan for your needs generally involves a good deal of research into the various options available to you. You can use the Canstar website or make your own enquiries to compare investment home loans based on features such as their interest rates, fees and the features that are important to you.
How do I apply for an investment home loan?
The application process for an investment home loan is normally fairly similar to applying for an owner-occupier loan, although lenders may also consider other factors to do with the property that could affect your ability to repay the loan you’re applying for.
These could include your potential rental income from the property, as well as whether the property is likely to appreciate in value. Because many lenders view investment home loans as riskier from their perspective than owner-occupier ones, the maximum loan-to-value ratio (LVR) you can access on an investment loan may be lower, meaning the deposit you need may be larger than if you were buying the home to live in yourself.
Consider seeking professional financial advice to help you through the application process, particularly if you are considering investing in property for the first time. It’s also important to read the documentation for a home loan before applying for it, which may include the Target Market Determination (TMD), Key Facts Sheet and other terms and conditions.
What are the current interest rates for investment home loans?
To help you narrow down your options, we’ve listed some of the lowest-rate investment home loans on Canstar’s database at the time of writing. Please note that the interest rates below don’t take into account your credit history or other factors specific to your application, so not everyone can qualify for a lender’s minimum advertised rate. Further eligibility criteria may be assessed and determined by the lender.
The home loans listed below are for borrowers looking to purchase a home as an investment. You can also view some of the lowest owner-occupier home loan rates on Canstar’s database.
Variable investment home loans
The comparison table below displays some of the variable rate investment home loan products on Canstar’s database with links to lenders’ websites. The products displayed are based on a loan amount of $350,000 at 80% LVR in NSW, available for principal and interest repayments. The results are sorted by ‘comparison rate’ (lowest to highest), then by provider name (alphabetically). Consider the Target Market Determination (TMD) before making a purchase decision. Contact the product issuer directly for a copy of the TMD. Use Canstar’s home loan selector to view a wider range of home loan products. Canstar may earn a fee for referrals.
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Fixed rate investment home loans
Lowest interest rates for 1-year fixed home loans
The comparison table below displays some of the 1-year fixed rate investment home loan products on Canstar’s database with links to lenders’ websites available for a loan amount of $350,000 at 80% LVR in NSW, and available for principal and interest repayments. The results are sorted by ‘current rate’ (lowest to highest), then by provider name (alphabetically). Consider the Target Market Determination (TMD) before making a purchase decision. Contact the product issuer directly for a copy of the TMD. Use Canstar’s home loan selector to view a wider range of home loan products. Canstar may earn a fee for referrals.
*Comparison rate based on loan amount of $150,000. Read the Comparison Rate Warning.
Lowest interest rates for 3-year fixed home loans
The comparison table below displays some of the 3-year fixed rate investment home loan products on Canstar’s database with links to lenders’ websites available for a loan amount of $350,000 at 80% LVR in NSW, and available for principal and interest repayments. The results are sorted by ‘current rate’ (lowest to highest), then by provider name (alphabetically). Consider the Target Market Determination (TMD) before making a purchase decision. Contact the product issuer directly for a copy of the TMD. Use Canstar’s home loans comparison selector to view a wider range of home loan products.
*Comparison rate based on loan amount of $150,000. Read the Comparison Rate Warning.
Lowest interest rates for 5-year fixed home loans
The comparison tables below displays some of the 5-year fixed rate investment home loan products on Canstar’s database with links to lenders’ websites available for a loan amount of $350,000 at 80% LVR in NSW, and available for principal and interest repayments. The results are sorted by ‘current rate’ (lowest to highest), then by provider name (alphabetically). Consider the Target Market Determination (TMD) before making a purchase decision. Contact the product issuer directly for a copy of the TMD. Use Canstar’s home loans comparison selector to view a wider range of home loan products.
*Comparison rate based on loan amount of $150,000. Read the Comparison Rate Warning.
While a low interest rate is a significant factor, it’s not the only thing you should take into account when comparing different home loans. You should also consider the features of your home loan and any fees charged, to help ensure that you’re getting a good deal overall. Consider taking a look at Canstar’s most recent Home Loan Star Ratings and Awards to see how our experts rated a variety of products, including fixed and variable investment loans, loans that come with principal and interest repayments and those that allow borrowers to make interest-only payments for an initial period of time.
And as always, you can compare more home loans – both residential and investment – with Canstar to help you find one suitable for you.
This article was originally written by Tamika Seeto and has been updated.
Cover image source: zstock/Shutterstock.com
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This article was reviewed by our Sub Editor Jacqueline Belesky before it was updated, as part of our fact-checking process.
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