How to Get an Investment Loan in Kellyville

Buying an investment property starts with understanding how a lender will see your finances. If you live in Kellyville and are thinking about your first investment, this guide walks you through it one step at a time.

You do not need to know every term before you begin. You need to know what lenders check, what choices you will face, and what each choice costs you. That is what we cover here.

How Does an Investment Loan Work?

An investment loan is a home loan used to buy a property you plan to rent out. The lender assesses your income, debts and the property, then decides how much you can borrow.

The loan works much like a regular home loan. You borrow against the property, pay interest, and can choose between a variable rate and a fixed rate. A variable rate can move up or down over time. A fixed rate stays the same for a set period, but the trade-off is less flexibility if you want to change the loan during that period. Rules about fees, extra repayments and offset accounts on fixed loans differ between lenders, so check them before you commit.

If you want a broader look at the product, our investment loans page explains the basics.

How Much Can You Borrow for an Investment Property?

Your investment loan amount depends on your income, your debts and the lender's own policy. Banks must test whether you could still afford repayments if the interest rate rose by at least 3.0 percentage points above the loan's actual rate.

This buffer is set by the banking regulator, APRA, and it applies to new borrowers at banks and similar lenders. It means a lender may approve less than you expect. Credit card limits count too, because lenders apply a notional repayment to the full limit, even if you pay the card off each month.

Rent can help your application. APRA expects lenders to count no more than 80 per cent of expected rent as income, to allow for gaps between tenants. How a lender treats rental evidence, such as an appraisal for a property you have not yet bought, is up to that lender.

To see where you stand, read about borrowing capacity before you start house hunting.

How Do Interest Only and Principal and Interest Compare?

With interest only, you pay just the interest for a set period, so your loan balance does not go down. With principal and interest, each repayment pays the interest and also reduces the loan.

Here is an illustrative example using a 6.75% p.a. rate. On a $600,000 loan, one year of interest is $40,500, or about $3,375 a month. That is the interest-only repayment. Now suppose the loan is 30 years with a 5-year interest-only period. Once the interest-only period ends, you pay principal and interest over the remaining 25 years. At the same 6.75% rate, that repayment is about $4,145 a month. It is higher than a 30-year principal and interest repayment would have been, because you have less time to pay the balance off.

The trade-off is clear. Interest only lowers your repayments for a while, but your balance stays the same and your repayments rise later. It also does not help you borrow more. Lenders assess interest-only loans using the shorter remaining term, so the amount you can borrow can be lower, not higher.

For more detail, see our page on interest only loans.

What Is the 80 Per Cent LVR and When Does LMI Apply?

LVR, or loan-to-value ratio, is your loan as a percentage of the property's value. Lenders mortgage insurance (LMI) is generally required when the LVR goes above 80 per cent.

LMI protects the lender, not you, and you pay the premium. The amount depends on the loan size and LVR, and each insurer has its own approval rules. The 80 per cent line is not a legal limit on borrowing. It is the point where LMI usually starts. A bigger deposit can avoid it, but it means more of your own savings go in upfront. A smaller deposit keeps more savings in your pocket, but adds the LMI cost and a larger loan.

An offset account does not reduce your loan for LVR purposes. It only reduces the balance your interest is charged on.

Can You Use Equity From Another Property to Invest?

Possibly. You may be able to use equity from a home you already own as part of your investment purchase, but any equity release needs lender approval and must pass the lender's serviceability assessment on your new total debt. At banks and similar lenders, that assessment uses the 3.0 percentage point buffer. Each lender sets its own caps. Any borrowing that takes you above 80 per cent LVR also needs approval from the LMI insurer.

Consider a homeowner in Kellyville who wants to buy a rental. They ask a lender to release some equity from their home to cover the deposit on the new property. The lender sets its own cap on how much equity can be released. The homeowner then uses the released funds only for the investment purchase, so the interest on that portion relates to an income-producing purpose. They keep the funds clearly separate from any personal spending. The outcome is a clean loan structure that is easier to explain to their accountant at tax time.

The trade-off is that you are now borrowing against your own home to fund the new property, so a problem with the investment can affect the home. Our equity release loans page covers this in more detail.

How Does Tax Affect Your Investment Property?

Interest on money borrowed to buy a rental property is generally deductible while the property is rented or available for rent. Only the interest part of a principal and interest repayment is deductible, not the whole repayment.

The rules on negative gearing have changed. Net rental losses on homes held at 7:30pm AEST on 12 May 2026 can still be deducted against other income, including salary, until the property is sold. Eligible new builds acquired after that date also keep this treatment. From the 2027-28 income year, losses on established homes bought after that time can only be used against other residential property income, with excess losses carried forward. The capital gains tax discount rules also change from 1 July 2027.

These rules are detailed and depend on your situation. Please speak with your accountant before you decide, and do not assume any tax outcome is certain.

If you are weighing up a house against a unit, a new build against an established home, or other ways to grow over time, our page on expanding your property portfolio is a good next read.

Why Use a Broker for Your Investment Loan Application?

A broker can compare loans from the lenders on their panel. Lenders treat rental income, equity and interest-only periods differently, and a broker helps you match your situation to the right lender.

We also help you plan the order of steps. It helps to check your borrowing power and line up finance before you make an offer. If you already have a loan, we can review it too, using our investment loan refinancing service.

If you would like a first look at the process, our guide to buying your first investment property walks through it in plain English.

Call one of our team or book an appointment at a time that works for you. We will go through your numbers with you, answer every question, and explain each step in plain language, so you feel confident before you make a move.

Frequently Asked Questions