5 considerations for getting a property investment loan

Securing finance for an investment property requires thorough research and careful consideration. To help with this we share 5 important things to think about before deciding which loan to go with.

Before deciding on your property finance there are 5 key considerations.

1. Determine your investment property goals

For example, do you want to maximise your cash flow and tax deductions in the short term? If so, then an interest-only loan would be your best option.

But if you want to maximise your long-term capital growth, then a principal and interest loan may be your best option.

2. Research interest rates

Your interest rates on an investment property loan are tax-deductible, but it still makes sense to choose the lowest interest rate for the type of investment property loan that suits your investment property goals.

You should also consider whether to take out a loan with a fixed interest rate or a variable rate. You will have repayment certainty with a fixed rate, but if rates fall, you will be stuck with higher repayments. You could hedge your bets by taking out a split rate loan which isa combination of fixed and variable rates.

3. Research loan fees

Investment property loan fees are also tax-deductible, but once again it makes sense to choose the lowest fees for the type of investment property loan that suits your needs. The comparison interest rate reflects most loan fees as well as the interest rate, so use that rate in your decision-making.

4. Consider the loan repayments you can afford

Interest-only loans will have lower repayments than principal and interest or equity loans for the same borrowed amount. But don’t forget that you can use the rental income that your investment property generates to help you make your loan repayments.

5. Consider loan features

Some investment property loans come with additional features like offset accounts or redraw facilities. You need to consider whether you need these features or not, as there are likely to be fees associated with them. 

As you can see, there’s a lot of research that you need to do and a lot to consider. But you don’t have to go it alone.

While your interest and loan fees are both tax-deductible for an investment property, it still makes sense to choose the best value loan that suits your needs.


How we can help

Choosing the right investment property loan is a crucial decision and it’s smart to get expert advice to help you. It will also save you a lot of time. Our team at DPN are investment focused finance experts and can help you to choose the right investment property loan for your needs and goals.

We can also help you to choose the right investment property to buy, as well as assist you with its ongoing management to save you any hassles and maximise your investment return.

Contact us today to find out more

DPN's finance team offer:

  • Smart finance solutions
  • Products from over 30 lenders
  • Investment finance experts
  • Refinance specialists
  • SMSF property finance

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