INVESTMENT FINANCE BUILT AROUND THE STRUCTURE
Investment property lending can be assessed differently from an owner-occupied home loan. Rental income, existing debts, loan purpose and repayment type can all affect how lenders assess the application and what lending may be available.
We arrange the lending side of an investment purchase and consider lender options that appear relevant to your income, equity and existing commitments. Decisions about the investment itself remain yours and your advisers'.
WHAT WE ARRANGE FOR INVESTORS
First Investment Property
For a first investment purchase, assessment may consider the expected rental income and any existing home loan or other commitments.
Growing a Portfolio
An additional investment loan may require assessment of existing loans, rental income and security arrangements across other properties.
Using Equity
We assess whether equity in an existing property may support additional borrowing for a deposit or purchase costs, subject to valuation, serviceability and lender policy. Mixing personal and investment uses of those funds can complicate records and the information your accountant needs.
Refinancing Investment Debt
We review an existing investment loan's rate, structure and lender options, including switching costs, to assess whether a change may be worthwhile.
Investment Construction
We consider finance for building an investment property, where funding may be staged and assessment may consider the completed value and expected rent.
Interest-Only Periods
During an interest-only period, scheduled repayments cover interest without reducing the principal. Repayments will usually rise when principal-and-interest payments begin over the remaining term, so the step-up needs to be planned for.
WHAT SHAPES AN INVESTMENT ASSESSMENT
Investment lending policy varies between lenders. These are some of the factors that can affect how an application is assessed.
Rental Income
A lender may include only part of the expected or actual rent when assessing servicing. The amount recognised and evidence required depend on its policy and the property.
Existing Commitments
Your own home loan, other investment loans and personal debts can all form part of the servicing assessment.
Equity and Security
The lender's valuation, existing debt and security requirements affect whether equity may be accessible. How properties are linked to loans can also affect options when selling or refinancing.
Loan Purpose
Mixing personal and investment uses of borrowed funds can complicate record-keeping. Loan splits can help document intended purposes, but actual use also matters and tax treatment remains a question for your accountant or registered tax agent.
Repayment Type
An interest-only period may be assessed using principal-and-interest repayments over the remaining term. We consider that future repayment step-up as well as the initial repayment.
The Property Itself
Location, property type and valuation can affect lender appetite and how much may be lent against the security.
HOW WE APPROACH INVESTMENT LENDING
01
Understand the Current Position
We establish your current lending, income and commitments, review whether equity may be accessible, and clarify what the proposed borrowing is intended to achieve.
02
Match the Structure to Suitable Lender Options
We identify lender options whose investment policy appears relevant to your position, including how loan splits and securities may be arranged.
03
Present the Application Clearly
If you choose to apply, we prepare the submission with the loan purposes documented, work through lender questions and conditions and, where approval is obtained and you proceed, coordinate the finance steps through to settlement.
WE ARRANGE THE LENDING, NOT THE INVESTMENT
Direct Broker Access
You deal with Christian directly through the review and, if you proceed, through lender assessment and settlement.
The Lending Side Only
We do not advise on which property to buy, whether an investment suits you, or its tax treatment. Those decisions sit with you and appropriately qualified advisers.
Works With Your Accountant
Where relevant, we work alongside your accountant on the information they provide while AGFB handles the lending structure. We do not provide tax or accounting advice. We consider lender options relevant to your location, property and circumstances.
COMMON QUESTIONS ABOUT INVESTMENT LOANS
How is rental income assessed on an investment loan?
Some lenders use only part of the expected or actual rent when assessing your capacity to repay, allowing for risks such as vacancy and property costs. The amount recognised and the evidence required vary by lender and property. Existing rent may be supported by different documents from a rental estimate for a proposed purchase. This is a lending-assessment allowance, not a statement of the rent you will receive. We check the relevant lender's treatment before an application is lodged.
Can I use one loan for both investment and personal purposes?
It can be possible, but combining personal and investment borrowing can make it harder to trace how funds were used. Separate loan splits and clear records may help with that task, but a loan label or split does not, by itself, determine the tax treatment. Actual transactions and later redraws can also matter. Your accountant or registered tax agent should advise on the tax position. AGFB documents the intended borrowing purposes and explains the lending structure; we do not determine deductibility.
Can I use the equity in my home to buy an investment property?
Equity is the gap between a property's value and the debt secured against it; it is not cash automatically available to spend. You may be able to borrow additional funds using your home as security, subject to valuation, serviceability and lender policy. That can increase the debt secured against your home, and the home may be at risk if the lending is not repaid. We assess what may be accessible and explain the proposed security arrangement before you decide.
What happens when an interest-only period ends?
Under a loan that converts to principal-and-interest repayments, the balance must be repaid over the remaining term once the interest-only period ends. The required repayment will usually rise because it now includes principal as well as interest. The actual amount depends on the remaining balance, rate and term at the time. An extension or refinance cannot be assumed: any new arrangement depends on lender policy and assessment. We help you understand that repayment step-up before an interest-only pathway is considered.
What is cross-collateralisation?
In property lending, cross-collateralisation links properties as security for a loan or group of loans, rather than keeping each security arrangement separate. It can reduce flexibility when selling or refinancing one property because the linked lending and security may need to be reassessed. Separate-security arrangements may be another option, subject to lender policy and the overall position. We explain which properties support which debts, and the implications for releasing security, before you decide whether to proceed. No arrangement is automatically preferable for every borrower.
What is the difference between interest-only and principal-and-interest repayments?
Principal-and-interest repayments cover interest and repay part of the loan balance. During an interest-only period, scheduled repayments cover interest without paying down principal, although extra repayments may be possible under the loan terms. Initial repayments may be lower, but that does not establish a lower total borrowing cost. The remaining debt usually moves to principal-and-interest repayments later, creating a repayment step-up. We explain the available terms and costs; any tax or investment strategy questions belong with your appropriately qualified adviser.