If you have a mortgage on your home and have built up some equity, you may be able to use these funds as a deposit to purchase your investment property. Alternatively, you may be able to buy an investment property directly using an investment loan.

Most lenders will allow you to use a shaded amount of the rental income towards your loan assessment. Shaded rental income uses a reduced percentage of the rental income for assessment.

You will find our Cavpex Process here.

Each bank has their own policies when it comes to how much they will lend. Generally speaking, the key factors below influence how much you can borrow:

• Your Income
• Your Liabilities (For example, Credit Cards and Personal Loans)
• Whether you have any dependents
• The type and structure of your loan (For example your loan term)
• The LVR (Loan to Value Ratio). If the value of your loan reflects 80% of your property market value, then your LVR is 80%. When your LVR exceeds 80%, your interest rate goes up which can reduce your borrowing power.

Yes! There are many strategies. For example, increasing your income or reducing your liabilities. Your borrowing power is also influenced by your loan term. A 30-year loan term enables a higher borrowing power compared to a 20-year loan term.

When it comes to purchasing an investment, it is best to find a mortgage broker first. As Sydney Mortgage Brokers, we do the shopping around for your loan. We filter through and find your options then sit down and present them to you. That way you understand what your borrowing capacity is then start looking for an investment property in your price bracket.

Lenders Mortgage Insurance (LMI) protects the lender in the event that a borrower(s) is not able to repay a investment loan. If LMI is applicable, the borrower must pay for it. Note, a borrower can add LMI to the loan.

Generally speaking, LMI is added to a loan when the LVR goes over 80% but, this varies from lender to lender.

Some lenders allow professionals to not pay LMI. This applies within select industries (For example, Medical and Legal). Contact us to see if you're eligible!

There is a bit to unpack here! Let’s tackle fixed interest rates first! Most lenders allow you to ‘Fix’ your interest rate for a 1 to 5 year term. This will provide you with peace of mind as you will know how much your repayments will be during the fixed term. You will also be protected from an increase in interest rates during the fixed term. On the flip side, if interest rates come down during your ‘Fixed’ term you will not benefit from the reduced rates. Some lenders products do not include an offset account and/or a redraw facility when adding a fixed term.

Variable interest rates can vary depending on the results of the Reserve Bank of Australia’s (RBA) monthly monetary policy meetings. The RBA can increase or decrease the cash rate. Your lender decides whether to pass on this change to the variable interest rate of your loan. The downside here is that you do not have certainty with your repayments. The upside here is that most lenders can provide you with an offset and/or redraw facility with a variable interest rate loan.

The principal of your loan is the amount you have borrowed. The interest is the amount charged on the principal. So, Principal and Interest repayments cover both. Interest Only repayments only cover one, the interest. Each have their advantages and disadvantages so contact us to discuss further!

An offset account connects to your investment loan account. Most lenders treat an offset account like a transaction account. Your principal balance reduces by the amount in an offset account when calculating interest. On the flip side, having an offset account may attract a higher interest rate.

A redraw facility allows you to access some or all of your extra repayments without fees. Extra repayments can help you pay your loan down faster. But like an offset account, they may attract higher interest rates.

With one annual package fee, some lenders will allow you to package your loan. Packaging can discount interest rates and reduce annual fees for other products. For example, credit cards and transaction accounts. This varies from lender to lender. Contact us today to see what options you have!

When you split your loan you divide it into parts. One part may have a fixed interest rate and the other a variable interest rate. The amount you portion to each is up to you.

• Stamp Duty: this is a tax to transfer the title of the property into your name.
• Building and Pest Report: this is an inspection of the building that will detail any defects and/or pests found.
• Conveyancing Fees: this is a fee charged by a conveyancer or solicitor. They manage the transfer of ownership from the seller of the property to the buyer.
• Registration Fees: these are fees charged by the Land Titles Office to register a mortgage.
• Loan Application Fees: these are fees charged by lenders to setup a loan. These vary from lender to lender and product to product.
• Building Insurance: this is an insurance policy that protects you and the lender. It covers the building if it is damaged or destroyed.
• Strata Fees (If applicable): these are fees payable to maintain the facilities in a shared living building. For example, apartment buildings or townhouses.
• Council Rates: these are the fees charged by the local council for their services. For example, weekly rubbish collection.

Depending on the lender and product, you may or may not have to pay fees to pay off your loan early. This will form part of our discussion early on when we understand your needs and objectives. Contact us today to see what your options are!

Again, depending on the lender and product, you can make repayments weekly, fortnightly, or monthly.

Most lenders will allow you to set a loan term of up to 30 years.

This is an important one! An advertised rate will advise you of the interest rate on a investment loan. A comparison rate will advise you of the interest rate with all the fees considered on the investment loan. So, always look at the comparison rate to see the real cost of the loan!

As a self-employed applicant, you generally have 3 options when applying for a investment loan.

• Full Doc: This is where you provide a complete set of documents to the lender to assess your loan application. This option will attract a lower interest rate.
• Low Doc/No Doc: This is where you provide minimal documentation and use other means to support your application. For example, using an accountants letter. This option will attract a higher interest rate.