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Investment Property Mortgage Broker Melbourne

If you need finance for residential property investment, contact our experienced Investment Property Mortgage Broker, Melbourne.

According to the Australian Bureau of Statistics, 2.02m households in Australia owned a residential investment property in 2020.

Many investors like the tangible nature of property investment. Historically, it has also been more stable than some other forms of investment.

While prices are softening due to rising interest rates, investors have enjoyed strong returns over the past decade. Despite the current cycle, residential property investment is likely to remain a popular choice for many Australians.

Investment Property Mortgage Broker - Get in touch

Carlo Colangelo - The 500 Group - Mortgage Finance

Carlo Colangelo

Investment Property Mortgage Broker

    What can be financed

    Lenders will approve finance for a wide range of residential investment property investments such as:

    • Houses
    • Town Houses
    • Duplexes
    • Apartments (Apartment less than 50 squares metres, including the balcony are not favoured)

    If you need guidance around what Lenders look for, and what they will lend against types of properties – get in touch with our Investment Property Mortgage Broker Melbourne.

    What equity is required?

    “How much do I need to contribute to the purchase?”, is one of the most common questions our Investment Property Mortgage Broker is asked.

    The amount of equity will depend on several factors including:

    • Your debt servicing capacity
    • Your credit rating
    • The type of property being purchased (More equity will be sought for less favoured property types/locations)

    However, as a guide, most Lenders currently require an equity contribution of at least 20%. This can be in the form of savings, or equity held in other properties.

    What other costs will I need to cover?

    In addition to your equity contribution, you will also need to show you can cover:

    • Stamp duty
    • Conveyancing fees
    • Legal costs
    • Search fees
    • Pest and related building reports

    Lenders will also want to see you can also cover ongoing costs associated with owning the property such as:

    • Council rates
    • Water rates
    • Strata fees if applicable
    • Maintenance & repairs
    • Property management fees if applicable
    • Vacancies
    • Land tax
    • Insurance

    What Interest Rate Will Apply?

    Again, this is a question our Investment Property Mortgage Broker is frequently asked.

    The interest rate will depend on a number of factors including:

    • What equity you contribute
    • Your credit rating
    • Your debt servicing capacity
    • The type of property and location
    • The Lender appetite

    Generally residential investment property rates tend to be approximately 0.50% to 0.75% above the occupied housing rate.

    Both fixed and variable interest rates (and/or a split of both) are available, as are Offset Accounts.

    Interest Only Loans

    Historically property investors have preferred interest only loans to maximise interest deductibility and to minimise cash flow drain.

    However, until recently, we have seen many investors take advantage of historic low interest rates to repay borrowings, thereby converting negatively geared properties to positive geared.

    Most Lenders are prepared to approve interest only terms up to 5 years. (Some will do 10 years, but there are conditions)

    However, you need to demonstrate:

    • You can repay the loan over the remaining commercial term. For example, if you sought a 5-year interest only period, you would need to show you can repay the loan over the remaining 25 years
    • That you could repay the loan in the event of future interest rate rises. Currently Lenders “stress test” finance applications by adding 3% to the actual interest rate

    Can I borrow money through my Self-Managed Super Fund?

    The answer to this is yes, you can buy an investment property and obtain finance through your SMSF:

    • The finance must be for investment purposes
    • The preferred repayments are principal and interest – interest only options are very limited
    • Interest rates are variable – additional rate discounts are not offered

    Why use our Investment Property Mortgage Broker

    As Finance Brokers we have access to more than 50 Lenders. This includes the major Banks, smaller Banks, Specialist Property Lenders, and Private Lenders.

    By using our Investment Property Mortgage Broker Melbourne, you enjoy:

    • Greater choice
    • More options
    • Peace of mind, knowing that the finance we obtain is truly market competitive.

    Our market access increases competition, which invariably leads to better outcomes for our clients.

    Importantly, we will ensure the finance we source compliments any other personal, or business borrowings you may have.

    If you are need Investment Property Finance, or would like to learn more, don’t hesitate to get in touch.

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