Are you using cash or equity for the deposit?

Equity release means the existing property is revalued and re-secured, which is a second approval process running alongside the first.

How is rental income assessed?

Lenders discount expected rent, commonly to account for vacancy and costs. The discounted figure, not the advertised rent, is what services the loan.

Interest-only or principal and interest?

Interest-only lowers the payment now and raises the total cost later, and the reversion at the end of the interest-only period is a real cash-flow event.

Which state, and what is the land tax position?

Land tax is a state tax with its own thresholds, and it applies to investment holdings in ways it does not to your own home.

Lane 3 of 7

Investment property loan

Borrowing against a property you intend to rent out, where tax treatment and serviceability buffers behave differently from a home loan.

You are in this lane if

The property will be rented, not lived in by you
You are using equity in an existing property, or a cash deposit
You are comfortable with the cash-flow gap between rent and repayments

You are not, if

You will live in it for part of the year — the classification and the rate change, and misdeclaring it is a serious problem
You are buying through a self-managed super fund — that is a separate lending regime with its own rules

What actually decides the outcome

In order. Getting these settled first is the difference between a useful conversation and three weeks of email.

Are you using cash or equity for the deposit? Equity release means the existing property is revalued and re-secured, which is a second approval process running alongside the first.
How is rental income assessed? Lenders discount expected rent, commonly to account for vacancy and costs. The discounted figure, not the advertised rent, is what services the loan.
Interest-only or principal and interest? Interest-only lowers the payment now and raises the total cost later, and the reversion at the end of the interest-only period is a real cash-flow event.
Which state, and what is the land tax position? Land tax is a state tax with its own thresholds, and it applies to investment holdings in ways it does not to your own home.

Have this ready

Assembled before you start, not chased afterwards.

Income evidence, plus rental appraisal or existing lease for the target property
Statements for every existing property loan and its current rate
Latest tax return and notice of assessment if you already hold investments
Council rates and strata levies for any property you already own

Where people get caught

Budgeting on gross rent. Management fees, insurance, rates, strata and repairs come out first.
Assuming negative gearing makes a bad purchase good. It reduces tax on a loss; it does not create a gain.
Ignoring that a rate rise hits every loan you hold at once when properties are cross-secured.

The official source

These set the rule. Anyone describing it to you — including this page — is a summary, and summaries go stale.

Structure of this page reviewed 17 August 2026. Follow the links for the current position.

How your income changes this lane

Salaried employee Undisclosed buy-now-pay-later accounts and unused credit card limits. The limit counts against you, not the balance. Business owner with entities Cross-guarantees between entities. One weak entity can hold up the whole application. New to Australia Foreign investment rules are federal and separate from lending. Check them before you sign a contract, not after.

Not your lane after all?

First home loan Refinance Self-employed and low doc Commercial and business lending Car and personal loans Bridging finance

Run the three questions again

General information. General information about how Australian lending is organised. Rules, thresholds and eligibility are set by government agencies and change; each lane links to the source so you can check the current position. It does not take your own circumstances into account.