Low Deposit Investment Loans

Yes. If you own your home and it’s increased in value, you can borrow against that equity (up to 80% LVR on your home) and use the funds as deposit for the investment property. This avoids needing cash savings and sidesteps genuine-savings rules at most lenders. The downside: your home loan grows, and you’re servicing two loans. Andy structures it so the equity loan sits in an offset or separate split to keep the interest deductible where it matters.

Genuine savings is money you’ve held in your account for at least three months. Most lenders require 5% of the purchase price in genuine savings when you borrow above 90% LVR. Sale proceeds from another property, inheritance, or gift money don’t always count unless the lender’s policy explicitly allows it. Some lenders accept a ‘savings history’ (regular deposits over six months proving you can save) instead of a lump sum. Andy knows which lenders are flexible and what documentation makes non-genuine funds acceptable.

At 90% LVR on a $500,000 purchase (loan of $450,000), LMI typically ranges $13,000–$16,000 depending on lender, postcode, and whether you’re a single or joint application. Couples sometimes get a 10-15% LMI discount. You can pay it upfront or capitalise it into the loan. Capitalising means you’re paying interest on the LMI for 30 years, which adds roughly $18,000 in extra interest over the loan’s life.

Yes, most lenders. Investment loans above 80% LVR attract a rate loading of 0.3-0.7% above the standard investment rate. On a $450,000 loan, 0.5% costs you an extra $2,250 per year. A few lenders treat 85% LVR the same as 80% if your income and credit score are strong. Andy finds the lender where the premium is smallest or zero for your scenario.

Rarely. Most lenders cap investment loans at 90% LVR (10% deposit). A handful offer 95% LVR if you’re also an owner-occupier using equity from your home — effectively a cross-collateralised structure. The LMI on 95% LVR is prohibitively expensive (often $20,000-$28,000 on a $500,000 loan), and the rate premium is 0.8-1.0%. Almost always better to save to 10% or use a guarantor to hit 80% LVR.

Pre-approval: 3-5 business days if your income and credit are clean. Formal approval after you’ve found the property and the valuation is ordered: 5-10 business days. Total time from first conversation to settlement: typically 6-10 weeks depending on property search time and settlement date negotiated in the contract. If you’re using equity from your home, add 1-2 weeks for the home valuation and equity calculation.

Payslips (last two), tax returns (last two years if self-employed or claiming rental income), bank statements (three-six months showing savings and living expenses), ID (driver’s licence + Medicare card or passport), employment letter, and a rental appraisal for the property you’re buying. If you’re using equity, the lender needs a valuation of your current home. If deposit funds came from a gift or sale, provide the settlement statement or signed gift letter.

Yes, by putting down 20% deposit or more (80% LVR or below). If you’re $10,000-$30,000 short, a family guarantor using equity from their home can bridge the gap so your effective LVR drops to 80%. The guarantor’s property secures the shortfall, not the full loan. Once your investment property appreciates 5-8%, you can refinance and release the guarantee without the guarantor ever making a payment.

Upfront keeps your loan balance lower and saves you interest over 30 years. Capitalising it into the loan means you’re borrowing the LMI premium and paying interest on it — on a $12,000 premium at 6.5% over 30 years that’s roughly $16,500 in extra interest. If you’re cash-constrained and need to preserve deposit for settlement costs, stamp duty, and an emergency buffer, capitalising makes sense. If you have the cash, pay it upfront.

Your loan balance stays the same, so your LVR increases. If the value drops 5-10%, you’ll be above 90% LVR and won’t be able to refinance without bringing cash to the table or waiting for the value to recover. You keep making repayments as usual; the lender doesn’t call in the loan unless you default. If you want to sell, you’ll need to cover the shortfall between sale price and loan balance plus selling costs. This is why a 10-15% buffer (buying at 85% LVR instead of 90%) gives you breathing room if the market softens.