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Which lenders have the best investment home loan rates?

If you’re planning to buy an investment property, you probably want to save as much money for a deposit as possible. Interest can quickly accumulate on a home loan, so it’s in your interests to secure a low interest rate.

For example, if you had a $200,000 loan balance with an interest rate of 4% over 20 years, you’d pay about $1,212 per month. If your interest rate was 3%, you’d pay about $1,109 per month. If your interest rate was 2%, you’d pay just $1,012 per month. $100 or $200 per month may not seem like a big deal, but it definitely adds up over time.

Interest rates are at record lows right now, so it makes sense to take advantage of them while you can.

Try our home loan repayment calculator to see what your monthly repayments could look like for an investment property:

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Look at individual home loans, not specific lenders

Interest rates are somewhat volatile, meaning that they change and fluctuate according to the Reserve Bank of Australia’s (RBA) cash rate. Currently, the cash rate is at a historic low, so lenders should be offering low interest rates.

When comparing interest rates, make sure you are looking at investment home loan rates, rather than rates for owner occupied mortgages. Investment property rates will generally be higher than owner occupied ones as you are likely to profit from your investment.

The best way to search and compare interest rates is to shop around online and see what’s out there. Consider branching out from your current lender if you don’t feel like you are getting the best deal.

However, always keep an eye on what rates your lender is offering to new investors. Sometimes, all it takes to get a better interest rate is to ask your lender! Lendi’s Home Loan Specialists can negotiate on your behalf. Get in touch today to get started.

Search and compare online

As mentioned above, you can’t expect interest rates to remain static for long. So, it’s better to not get too attached to a lender. You can use online home loan platforms like Lendi to search for home loans that meet your criteria and align with your personal circumstances.

There are dozens of lenders around and many of them offer investment home loans. This means that you should try to shop around and assess your options.

Plus, if you decide to apply for a home loan, you can do it all online with Lendi. The process is easy and you’ll have the support of a Home Loan Specialist the entire time. This way, if you have any technical questions or hick-ups along the way, you’ll have expert advice on hand.

Start searching and comparing investment home loans today:

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Consider what costs are involved

You may come across an awesome home loan with a great interest rate that you are excited to apply for. However, before you get going, make sure you check whether there are any extra fees involved with the mortgage.

Don’t be blinded by the prospect of a super-low rate before you check out the details. Sometimes lenders offset a low interest rate with high fees. These fees may include:

  • Application and/or settlement fees
  • Monthly or annual maintenance fees
  • Fees for home loan features (e.g. redraw facility withdrawal fees)
  • Property valuation fee

Don’t let fees outweigh a great interest rate!

How about interest only home loans?

Interest only home loans are a mortgage option for many property investors. With this loan type, you only pay the interest accumulating on your loan balance. You don’t reduce your loan balance (principal) at all during the interest only period.

Pros of interest only loansCons of interest only loans
The interest paid is usually tax deductibleHigher interest rates due to the risk for the lender
You can maximise your cash flowInterest only loans may be difficult to be approved for
Option to sell your investment property during this time and profit, despite never making loan repaymentsSome borrowers struggle with the increased repayment amount after the interest only period ends.

If you’re interested in this home loan structure, it’s smart to speak with a financial professional. Lendi’s Home Loan Specialists can also assist you with this decision and outlining your other options.

Stuck on a bad interest rate? Might be time to refinance

Most investors will refinance their mortgages at least a couple of times over the course of the loan. A lot can happen in even just a year. So, the interest rate you got last year might not be the most competitive now.

Every good property investor should always be looking for ways to save money and maximise cash flow. Try to frequently monitor interest rates offered by your own lender and check out others too.

Refinancing is not just something to consider when interest rates drop. You might like to refinancing for a number of reasons:

  • You are unhappy with the service provided by your current lender
  • You want to switch between a fixed and varied interest rate
  • Your personal or financial situation has changed
  • You’d like to pay off the property faster

These are all reasonable, valid reasons for considering refinancing. If you plan to refinance from a fixed interest home loan, be aware of break costs. Break costs are charged when you refinance or ‘break’ your fixed rate loan before the end of the fixed period. To avoid break fees, it may be necessary to wait until the fixed period is over.

Got a home loan question? Just ask!

We're here to help. Get free expert advice at a time that suits you. Choose a time to chat with a Home Loan Specialist here

The information in this post is general in nature and should not be considered personal or financial advice. You should always seek professional advice or assistance before making any financial decisions.

Tags: interest rate, home loan, investment, investment property, investment loan, lender

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Check today's low rates

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Home loan repayment saver tool

Home loan repayment saver tool

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Important legal stuff

Lendi is the trading name of Lendi Pty Ltd (ACN 611 161 856), a related body corporate of Auscred Services Pty Ltd (ACN 164 638 171, Australian Credit Licence 442372). We will never sell your email address to any third party or send you nasty spam, promise.
# Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
Lendi is a privately owned and operated Australian business. Our mission is to change the way Australians get home loans by providing a faster, smarter and more secure home loan experience designed around the customer’s convenience and needs. Although Lendi compares over 1600 products (2,500+ products including feature and pricing variations) from more than 35 lenders, we don't cover the whole market or compare all features and there may be other features or options available to you. While Lendi is 35% owned by founders and employees, we have also been supported by some great minority shareholders including Bailador, Macquarie Bank Ltd and a number of Australian sophisticated investors. Lendi's board is majority independent and non-executive.
WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The comparison rates are based on a loan amount of $150,000 over a loan term of 25 years. Fees and charges apply. All applications are subject to assessment and lender approval. Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
IMPORTANT INFORMATION: Loan terms of between 1 Year and 40 Years are available subject to lender and credit criteria. Maximum comparison rate will not exceed 14.99% (see comparison rate warning above). Any calculations or estimated savings do not constitute an offer of credit or a credit quote and are only an estimate of what you may be able to achieve based on the accuracy of the information provided. It doesn't take into account any product features or any applicable fees. Our lending criteria and the basis upon which we assess what you can afford may change at any time without notice. Savings shown are based on user inputted data and a loan term of 30 years. All applications for credit are subject to lender credit approval criteria.
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