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  1. #1

    Borrow more on investment loans?

    Is it true that you can borrow more if it is for an investment property? If yes, do all banks and lenders offer this?

  2. #2
    Actually in terms of loan to value ratio, some lenders won't go as high on an investment property as they will on an owner occupied property. What I think you may have meant is in terms of borrowing power though.

    Each lender calculates borrowing power differently, but generally speaking, the banks calculate your uncommitted monthly income by taking a percentage of the rental income (usually 80%) and adding it to your other income and subtracting your expenses (including rent in this case). If this figure is higher as an investment then you will be able to borrow more.

  3. #3
    Yes. The golden rule of borrowing money is to borrow for assets such as property that go up in value over time not down. Don't borrow for consumables, things that depreciate.

    Not all banks are offering those kind of lending opportunities.

  4. #4
    Are you asking whether you can borrow at a higher LVR for an IP or whether your borrowing capacity increases if the purchase is for an IP?

    If the former - then generally no. You can still get 95% + LMI lends on IPs but there not as common as 95% + LMI loans for owner occupied purchases.

    With the latter - the rental income will be taken into consideration when assessing your borrowing capacity - as a general rule of thumb, it's 75% to 80% of the rental income that's taken into consideration.

  5. #5
    Yes you can borrow money to finance a property from a mortgage but make sure that you also have a loan so that you can still refinance your investment.


 

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