Compare investment home loans for September 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 20 September 2024 Important disclosures and comparison rate warning*

Investment property loan comparisons on Mozo

  • Unloan Variable

    • Investment
    • LVR <80%
    Interest rate
    6.29 % p.a.
    Variable
    Comparison rate
    6.20 % p.a.
    Initial monthly repayment
    $3,092
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for investors. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

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September Investment Home Loan Snapshot

If you’re a property investor who wants to maximise their income, it’s important to reduce as many of your expenses as possible. 

Your investment home loan repayments will be one of your larger expenses which, if you find the right one, can help shave down your monthly costs significantly.

For example, the average variable investor loan rate† in the Mozo database is 7.11% p.a., while the lowest rate is 6.04% p.a. (6.09% p.a. comparison rate*), from Easy Street.

On a $400,000 investor home loan over 25 years, this is a monthly difference of $268, highlighting why it’s so important to make sure you’re on a competitive rate.

Lowest investment loan rates in September 2024

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

Variable investor loan rates

Fixed investor loan rates 

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 at 1 September 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.

Brands we compare

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Home loan customer reviews

Bank of Queensland Home Loan
Overall 2/10
Disappointed with Lack of Communication

Disappointed with Lack of Communication on Home Loan Interest Rates : I’ve been a home loan customer with the Bank of Queensland (BOQ) since 2015, and while I initially had no concerns, my experience over the years has left me feeling disappointed, particularly regarding the lack of transparency around interest rates. What Happened For many years, I wasn’t aware that it was my responsibility to regularly check and request updates on my home loan interest rates. This was never communicated to me, and as a result, I was unknowingly paying higher interest rates compared to other customers. I only discovered this in 2022, after reaching out to BOQ with questions about my rate, and was shocked to find that I could have been paying much less. Financial and Emotional Impact Over time, this lack of transparency cost me thousands of dollars in unnecessary interest payments. Beyond the financial impact, the emotional strain of realizing I had been overpaying for so long was incredibly stressful. I felt like I was left in the dark as a customer, and this has taken a toll. BOQ’s Response When I raised the issue with BOQ, I was offered a small goodwill gesture, which, while appreciated, didn’t fully address the stress and anxiety I experienced. I expected a more proactive approach from the bank in notifying customers about rate reviews, especially when significant savings are possible. While they have apologized, it still feels like the system is set up in a way that leaves customers uninformed unless they actively chase the information. Why I’m Sharing This I’m writing this review to raise awareness for other customers who might be in the same situation. If you’re with BOQ or any other bank, make sure to regularly review your loan terms and ask about better rates. Don’t assume your bank will notify you of available rate reductions. Key Takeaways: BOQ doesn’t automatically inform customers when better rates are available. You must actively request interest rate reviews, or you could end up overpaying. While BOQ offers customer support, I feel there is room for improvement in their communication regarding loan management. I hope my experience can help other homeowners avoid the same pitfalls. It’s important to stay proactive with your finances, especially with long-term commitments like home loans. I hope to receive an automated message acknowledging my review as others have, but my main goal is to raise awareness and help others make informed decisions.

Read full review

Disappointed with Lack of Communication on Home Loan Interest Rates : I’ve been a home loan customer with the Bank of Queensland (BOQ) since 2015, and while I initially had no concerns, my experience over the years has left me feeling disappointed, particularly regarding the lack of transparency around interest rates. What Happened For many years, I wasn’t aware that it was my responsibility to regularly check and request updates on my home loan interest rates. This was never communicated to me, and as a result, I was unknowingly paying higher interest rates compared to other customers. I only discovered this in 2022, after reaching out to BOQ with questions about my rate, and was shocked to find that I could have been paying much less. Financial and Emotional Impact Over time, this lack of transparency cost me thousands of dollars in unnecessary interest payments. Beyond the financial impact, the emotional strain of realizing I had been overpaying for so long was incredibly stressful. I felt like I was left in the dark as a customer, and this has taken a toll. BOQ’s Response When I raised the issue with BOQ, I was offered a small goodwill gesture, which, while appreciated, didn’t fully address the stress and anxiety I experienced. I expected a more proactive approach from the bank in notifying customers about rate reviews, especially when significant savings are possible. While they have apologized, it still feels like the system is set up in a way that leaves customers uninformed unless they actively chase the information. Why I’m Sharing This I’m writing this review to raise awareness for other customers who might be in the same situation. If you’re with BOQ or any other bank, make sure to regularly review your loan terms and ask about better rates. Don’t assume your bank will notify you of available rate reductions. Key Takeaways: BOQ doesn’t automatically inform customers when better rates are available. You must actively request interest rate reviews, or you could end up overpaying. While BOQ offers customer support, I feel there is room for improvement in their communication regarding loan management. I hope my experience can help other homeowners avoid the same pitfalls. It’s important to stay proactive with your finances, especially with long-term commitments like home loans. I hope to receive an automated message acknowledging my review as others have, but my main goal is to raise awareness and help others make informed decisions.

Less
Kannan, Western Australia, reviewed 2 days ago
Adelaide Bank SmartSaver Fixed
Overall 10/10
Excellent bank especially for home loans.

Excellent bank especially for home loans.

Read full review

Excellent bank especially for home loans.

Price
10/10
Features
9/10
Customer service
9/10
Convenience
7/10
Trust
10/10
Less
Ilan, Victoria, reviewed 2 days ago
Commonwealth Bank Home Loan
Overall 8/10
Good customer service in store

Big bank, so you know it's not going to close unexpectedly of anything, but also they have the power to care more or go above and beyond for its clients, but instead tend to find they are like any other bank (ie always passing on rate rises early etc). Mind you, staff at the local store are super lovely and helpful.

Read full review

Big bank, so you know it's not going to close unexpectedly of anything, but also they have the power to care more or go above and beyond for its clients, but instead tend to find they are like any other bank (ie always passing on rate rises early etc). Mind you, staff at the local store are super lovely and helpful.

Price
6/10
Features
8/10
Customer service
9/10
Convenience
9/10
Trust
9/10
Less
Cass, Victoria, reviewed 2 days ago

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