Investment home loans explained

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A guide to investment home loans

Updated March 08, 2024
Written by James Hurwood
Reviewed by Stephen Zeller

What to know when comparing investment home loans

Some of the major factors to keep in mind when comparing investment home loans include:

  • The interest rate. Investment home loans will typically have higher interest rates than those attached to owner-occupier home loans, which makes it doubly important to shop around for a competitive rate.
  • Features. The features you choose for your home loan can make a massive difference when it comes to the value you get out of your home loan, so choose wisely!
  • The loan type. It’s important to pick a product type that suits your financial needs and cash flow requirements, whether you opt for fixed rate, variable rate, interest-only or something else.

Farewell paperwork, it's Home Loan Heaven


Expert tips for choosing an investment home loan

As General Manager of Money at Compare the Market, Stephen Zeller wants to see prospective property investors make the right choice when it comes to their investment home loan. With that in mind, he has some tips for you:

Stephen Zeller
General Manager – Money

Existing equity can form part of your new loan deposit

If you already own an owner-occupied property and you’re wanting to purchase real estate for investment purposes, consider that you may be able to draw on available equity in your owner-occupied property and put it towards your investment property purchase. If your equity can bring the LVR of your proposed investment home loan under 80%, you’ll typically avoid paying lenders mortgage insurance (LMI), which could save you thousands of dollars.

Consider interest-only repayments

When purchasing an investment property, the option to make interest-only repayments may be available to you. Before deciding on a repayment type for your new home loan, it may be worth taking some time to discuss your investment strategy with your accountant or financial advisor. They’ll be able to help you decide which option may be most appropriate for you financially, both in the short and long term.

Our Home Loan Specialists are here to help!

It can feel like a maze trying to organise finance for just an owner-occupied property, let alone an investment property. Our expert team of Home Loan Specialists are here to assist you with any queries and discuss a variety of scenarios which may be of interest to you based on your own individual circumstances. Contact our team to get the answers to any queries you may have and they’ll be happy to assist.

What is an investment property home loan?

An investment home loan is a type of home loan designed for those looking to buy a property for investment purposes (i.e. renting it out to someone else to receive rental income). It’s different to an owner-occupier home loan, which are for buyers looking to purchase a primary place of residence for themselves.

While they’re a type of home loan with a very specific purpose, investment home loans aren’t necessarily what you’d call a niche product – most lenders that provide home loans will have an investment offering. In fact, August 2023 saw over $8 billion in new loans approved for investment purposes.1

Investment home loan rates, features and fees

Do investment home loans come with higher interest rates?

Can I get an interest-only investment home loan?

What features can I get on an investment home loan?

What do the fees look like on an investment home loan?

Meet our home loans expert, Stephen Zeller

Stephen Zeller
General Manager – Money

Stephen has more than 30 years of experience in the financial services industry and holds a Certificate IV in Finance and Mortgage Broking. He’s also a member of both the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) and the Mortgage and Finance Association of Australia (MFAA).

Stephen leads our team of Home Loan Specialists, and reviews and contributes to Compare the Market’s banking-relating content to ensure it’s as helpful and empowering as possible for our readers.

1 Australia Bureau of Statistics. Lending Indicators. 2023.

2 Reserve Bank of Australia. Lenders’ Interest Rates. 2023.

3 Australian Taxation Office. Rental expenses you can claim now. 2023.