Tips for securing an investment property in Australia

You may have noticed crackdowns on investor lending thanks to APRA tightening regulations in the sector. This includes limiting investor lending to 10% per annum, and ensuring new interest-only loans hit only 30%.

These restrictions are designed to pare back lending in the investor market, but it doesn’t necessarily mean bad news for property investors. Here’s why.

Responsible lending

APRA’s decision to tighten investor lending in Australia is mostly to ensure banks and other lending institutions are responsible about who they loan funds to.

Interest only loans are an example, as they attract a higher than average interest rate once the initial interest only period has passed.

As a result, people are more likely to default on interest only loans later down the track, as higher repayments can become difficult to meet.

For more on the risks of interest only loans, head here. 

Choose smart

If you are in the financial position to take out an investment loan for a property, then it is important to find a loan that not only matches your circumstances, but also saves you more.

A good mortgage broker compares many different loans from trusted lenders, and then pinpoints one that aligns with your investment goals.

As a result, you receive peace of mind, knowing you have secured the most suitable investment loan possible.

A mortgage broker should never recommend a loan that does not match your circumstances or repayment capacity.

Being realistic about your ability to pay off your investment loan is so important, as you will reduce ‘mortgage stress’, and be able to manage your finances in a sustainable way.

If you are feeling stressed about an existing mortgage loan, please contact a Capita finance professional. We may be able to recommend a solution to help improve your situation.

5 top investment property tips

• Look at areas that have experienced strong capital growth in the past few years. Check out www.realestate.com for data on this.
• Consider investing in areas outside your usual living radius, for example, suburbs that are being developed or growing tend to yield a greater return on investment.
• Look at less popular suburbs within 10 to 20 kilometres of the CBD, as they are likely to grow in the future.
• Secure the services of a mortgage broker who specialises in investment loans.
• Ensure all the financial information you submit to your broker is up to date, so their recommendations are as appropriate as possible.

Talk to an investment broker

Contact us for more information about securing an investment loan in Australia. We have investment loan professionals who can assist you with finding a loan that matches your goals and saves you more.

Financial Advice Disclaimer: This information is general in nature. Mortgage brokers do not provide financial advice. Clients seeking financial advice will be referred to a qualified financial planner.