TwoFold AI Q&A
Can I Get Investment Property Finance With a 10% Deposit?
Can I get investment property finance on a 10% deposit, and who can I save on TAX
Question: Can I get investment property finance on a 10% deposit, and can it help with tax?
Answer: Yes, it is possible to secure an investment loan with a 10% deposit, which means borrowing at a 90% Loan-to-Value Ratio (LVR). However, borrowing more than 80% of the property’s value will almost always require you to pay Lenders Mortgage Insurance (LMI). This is a one-off insurance premium that protects the lender, not you. Some lenders also have stricter deposit requirements for investment properties compared to homes you plan to live in, so not all will consider a 90% LVR for investors.
When assessing your application, lenders will look closely at your ability to service the new loan alongside your existing financial commitments. They will analyse your income, living expenses, and any current debts you have. Lenders will also factor in the potential rental income from the investment property, but they typically only use a percentage of it in their calculations to account for vacancies and other costs. A strong savings history and a clean credit file are also very important, especially when borrowing at a higher LVR.
At TwoFold Lending, we navigate these lender policy differences for you. We can identify which lenders are more comfortable with a 90% LVR for investors and compare the associated Lenders Mortgage Insurance costs, which can vary significantly between providers. We translate the complex serviceability calculations, including how each bank assesses rental income, to give you a clearer picture of your borrowing power before you apply.
Regarding tax savings, that falls into the category of financial advice, which as mortgage brokers we cannot provide. It is essential to speak with a qualified accountant or financial advisor to understand the tax implications of property investment, such as negative gearing. Their advice can also help inform the best way to structure your loan, which is something we can then assist you with.
Lender policies, interest rates, and eligibility criteria can change. For guidance tailored to your situation, speak with TwoFold Lending on 1300 100 019 or book an appointment.
Important: This answer is general information only and does not consider your objectives, financial situation or needs.