Compare investment home loans for October 2024

Australians are huge fans of investing in property to grow their wealth. Investing in residential real estate can offer tax-friendly returns and long-term growth. Mozo’s expert guides and handy calculators can help you compare investment loan rates, including interest-only and low-rate mortgage deals.

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Last updated 22 October 2024 Important disclosures and comparison rate warning*

Investment property loan comparisons on Mozo

  • Simple Home Loan Variable

    • Investor
    • Principal and Interest
    • LVR<60%
    Interest rate
    6.24 % p.a.
    Variable
    Comparison rate
    6.27 % p.a.
    Initial monthly repayment
    $3,075
    Go to site

    Enjoy a low variable rate with no application, ongoing or monthly fees to pay. Access your money via internet banking at any time with free redraws. Make additional repayments at any time. Available for owner occupied, investment and interest only repayments.

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October Investment Home Loan Snapshot

Worried about mortgage repayments eating into your returns? Compare investment loans to see if you can find a competitive interest rate on a loan that ticks all the right boxes. 

The average investment home loan rate in the Mozo database is currently 7.07% p.a.†, but there are still plenty of lenders out there with rates that start with a ‘6’. 

Lowest investment loan rates in October 2024

Out of the offers we track, the top five lowest investment variable home loan rates (P&I, $400K, LVR <80%) are all well below the average rate in the database, as at 1 October 2024, and include: 

Variable investor loan rates

Fixed investor loan rates 

  • 1-year: The Capricornian Fixed Premium Choice Investment Loan | 5.74% p.a. (7.80% p.a. comparison rate*)
  • 2-years: Newcastle Permanent Special Fixed Rate Home Loan | 5.59% p.a. (7.94% p.a. comparison rate*)
  • 3-years: Australian Mutual Bank Investment Fixed Rate Home Loan |  5.59% p.a. (6.63% p.a. comparison rate*)
  • 4-years: Newcastle Permanent Special Fixed Rate Home Loan | 5.69% p.a. (7.55% p.a. comparison rate*)
  • 5-years: Newcastle Permanent Special Fixed Rate Home Loan | 5.69% p.a. (7.37% p.a. comparison rate*). 

For more information on property investing, browse our home loan guides for tips and tricks, including why investors pay more for a home loan.

†Average investment home loan rate based on a $400,000 investment loan in the Mozo database, for a borrower with <80% LVR, making principal and interest payments, over 25 years. Correct as of 1 October 2024.

Investment Knowledge Hub

What is an investment home loan?

Investment home loans are used to purchase properties that the borrower doesn’t intend to live in. 

Instead, investors borrow the money to buy a property, intending to rent it out and profit both from rental income and (ideally) from property value growth.

This type of home loan differs from the sort you’d apply for if you wanted to live in the property yourself. Those are known as owner-occupier home loans.

How to compare investment home loans

Investment loans aren’t one-size-fits-all, but a general guideline is to look for a loan that balances features and costs with your property investing aims. 

When you compare, look at: 

1. Interest rates 

The interest rate on your loan will determine partly how much you need to repay each month. The higher your interest rate, the more you will need to charge your tenants for rent. Charge too much, and no one will be able to afford your rental, or you’ll start paying for your mortgage out of pocket. 

Look for lenders charging lower than the average investment loan rate (see the monthly snapshot above for the latest figures). Typically, you’ll find lower interest rates from smaller lenders, rather than the Big Four banks. 

2. Fees

Another consideration to make when you compare investment loans is fees. Simply put, they’ll eat into your profits. So, try to minimise your exposure to ongoing fees, and be aware of how much application and settlement fees set you back. 

3. Loan features

Different investment loans have options that could help you save, like free extra repayments, redraw facilities, offset accounts, and interest-only periods. Look into which features could be helpful to you.

Investing in a second property

Investing in real estate can make it easier to finance a second property, such as another investment or your dream home. How? By using your home equity.

Your equity is the value of your ownership. If you own a property worth $1 million but have $200k left on your mortgage, then you have $800k in home equity. 

Equity ($$) = Property value - loan value

If your loan size decreases or your property value increases, your equity rises. 

Equity is a form of wealth you can use to fund projects, like a second property. How it works is you refinance your home loan to “borrow” from your equity, giving you some cash. 

However, this tactic has pros and cons, so read more in the button below.

What are the benefits of investment home loans?

Only some people find their dream home right away. And that’s okay! Investment home loans let you access the benefits of owning property without living there.

Some perks of investing in property include:

  • Capital gains when you sell.
  • Rental income from tenants. 
  • Home equity as your ownership share increases.

The right investment home loan can make your investment profitable by cutting down on extra costs and accelerating your property journey toward full ownership.

Australian property is a relatively low-risk asset since property prices generally increase over time (a phenomenon called “capital growth”), though this will vary by location and property. 

Property investors also get a host of tax benefits.

Hot Tip!

Consult a tax professional to see what you can claim on your taxes. Eligibility for deductions with vary by property investor.

Investment Home Loan Calculators

Can your investment turn a profit? Crunch the numbers with Mozo's free mortgage calculators. See more

Investment FAQS

How do you apply for an investment home loan?

The application process for investment home loans is similar to all other loans. Once you choose a property and demonstrate serviceability through supporting documentation, you apply and get it approved by a lender of your choice for the loan amount you need to borrow.

What documents do you need to apply for an investment home loan?

You must give a home loan lender identity, financial, and property information in your investment application. This can include mortgage documents such as:

  • Driver’s licences and passports. 
  • Property valuation reports.
  • Asset portfolios and dividend statements.
  • Mortgage reports on any other properties you own.
  • Income and bank statements.
  • Debts and liabilities. 
  • Credit reports.
  • Superannuation balances. 
How is an investment home loan different from an owner-occupied home?

The main differences between owner-occupied and investment loans are lending criteria and cost. 

Lenders consider investment mortgages financially risky because the borrower often relies on rental income. So, to protect themselves from missed or defaulted mortgage payments, lenders often slap investment loans with high interest rates and stricter lending criteria, such as a larger deposit.

Can I switch from an investment loan to an owner-occupier loan?

Yes, you can refinance your home loan from an investment to an owner-occupied mortgage. You must meet eligibility requirements for your new home loan, such as having a good debt-to-income ratio and credit score and meeting minimum loan-to-value ratio (LVR) requirements.

How often should I review my investment home loan?

How often you should review your investment home loan is up to you, but once a year is an excellent place to start. This way, you can check your interest rate to ensure it stays competitive, see if your mortgage repayments have changed, and calculate how much equity you’ve accumulated.

What is negative gearing?

Negative gearing is when an investor loses more money maintaining a property than they make. Essentially, they return a loss. 

Negative gearing can come with tax benefits since the interest payments lower the investor’s taxable income for the year while still accruing their wealth in home equity

However, negative gearing can be financially risky – the investor will need enough cash to cover the temporary shortfall. 

Too many negatively geared properties in one area can also tank property values, eroding the equity the investor needs to build wealth.

Jack Dona
Jack Dona
RG146
Money writer

Jack is RG146 Generic Knowledge certified, with a Bachelor of Communications in Creative Writing from UTS, and uses his creative flair to cut through the financial jargon and make home loans, insurance and banking interesting. His reader-first approach to creating content and his passion for financial literacy means he always looks for innovative ways to explain personal finance. Jack's research and explanations have been featured in government publications, and his work is regularly featured alongside major publications in Google's Top Stories for Insurance.

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Home loan customer reviews

St.George Variable Home Loan (Advantage Package)
Overall 7/10
Customer first

When other banks closed the door to me, this one was the only one to accept me as a customer. And I never failed any payments at all. It felt less bureaucratic.

Read full review

When other banks closed the door to me, this one was the only one to accept me as a customer. And I never failed any payments at all. It felt less bureaucratic.

Price
7/10
Features
7/10
Customer service
7/10
Convenience
7/10
Trust
8/10
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Ana, New South Wales, reviewed about 1 hour ago
RAMS Home Loan
Overall 10/10
Reccomend RAMS for mortgage needs.

I have a mortgage with RAMS and since the beginning it has been easy. Their customer service is second to none, whenever I have needed to contact them they have Australian phone lines and answer promptly. I have never had an issue with them. Their app could be updated as it is a bit of an older interface and feels that way however it still does everything you need it to do.

Read full review

I have a mortgage with RAMS and since the beginning it has been easy. Their customer service is second to none, whenever I have needed to contact them they have Australian phone lines and answer promptly. I have never had an issue with them. Their app could be updated as it is a bit of an older interface and feels that way however it still does everything you need it to do.

Price
8/10
Customer service
10/10
Convenience
8/10
Trust
10/10
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Ella, Western Australia, reviewed about 1 hour ago
NAB Base Variable Rate Home Loan
Overall 6/10
Big bank so no chance for individual tayloring

NAB is of course one of the big 4, so knowing that they can disregard borrowers individual requests for tayloring home loans when you need to(which they will do !). That said they do have great packages that include credit cards, a good app to access your loan & lots of brick & mortor branches.

Read full review

NAB is of course one of the big 4, so knowing that they can disregard borrowers individual requests for tayloring home loans when you need to(which they will do !). That said they do have great packages that include credit cards, a good app to access your loan & lots of brick & mortor branches.

Price
6/10
Features
5/10
Customer service
5/10
Convenience
8/10
Trust
4/10
Less
Anella, Victoria, reviewed about 1 hour ago

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