Investment Property Interest Rates Australia: Compare Rates (2026)

Investor Home Loan Rates in Australia: Compare Rates (2026)

Interest rates on a rental directly affect borrowing costs, cash flow, and returns. Across Australia right now, home loan rates for rentals vary between about 5.99% and 7.50% per year depending on bank, loan terms, and whether you choose a fixed rate or variable rate product.

Some banks offer home loan products as low as 5.59% per year for variable-only terms if you've got a low loan to value ratio. Fixed interest rates for investors start at around 5.70% per year for a 1-year fixed term. On a half-million-dollar loan, that spread means you could be paying anywhere from $2,496 to $3,497 per month -- over $12,000 more per year at the top end.

Whether you're buying your first rental, refinancing an existing home loan, or just unsure whether you're getting a fair deal, this guide covers everything you need to know about home loan rates for the coming year. We'll look at current rates from the big banks, what drives the rate you're offered, how to use the comparison rate to compare loan products, and share strategies -- from how to apply through a mortgage broker to how to negotiate -- to get the lowest rate on the best terms.

Current Investor Home Loan Rates (April 2026)

Home loan rates for rental properties move regularly, but here's a snapshot of where the major banks sit as of April 2026. These rates apply to a $500,000 loan product on a standard 30-year term with an 80% LVR.

Bank or Lender	Variable Rate (p.a.)	2-Year Fixed (p.a.)	Comparison Rate (p.a.)	Monthly Repayment
CBA	6.64%	6.34%	6.70%	$3,203
Westpac	6.69%	6.39%	6.75%	$3,222
NAB	6.59%	6.29%	6.65%	$3,183
ANZ	6.64%	6.34%	6.70%	$3,203
Macquarie	6.29%	6.09%	6.35%	$3,098
ING	6.19%	5.99%	6.25%	$3,063
Ubank	6.09%	6.19%	6.15%	$3,028
Athena	5.99%	--	6.01%	$2,994

Rates are indicative only and subject to change. Each comparison rate is based on a $150,000 loan over 25 years per ASIC requirements, and includes standard fees and charges. Conditions apply -- always confirm current rates and comparison rates directly with each bank before you apply.

Use the PropBoss loan repayment calculator to model your exact home loan repayments at different interest rates, loan terms, and repayment types.

Investment Property Interest Rates

These rates should be reviewed against your loan amount, LVR, repayment type, and the features you need rather than treated as a single market-wide number.

How Home Loan Rates Compare: Rental vs Owner-Occupier

Home loans for rental properties almost always carry a higher interest rate than owner-occupier home loans. The premium typically ranges from 0.25% to 0.60% above the equivalent owner-occupied rate. On a $600,000 home loan, that 0.40% premium adds roughly $160 per month to your repayments -- or about $1,920 per year.

Why the gap? Banks view these loans as higher risk for several reasons:

• Default risk -- borrowers are more likely to stop paying on a rental home than on the home they live in during financial hardship
• APRA requirements -- the Australian Prudential Regulation Authority requires banks to hold more capital against this type of lending, and banks pass that cost on
• Vacancy risk -- if your rental sits vacant, your rental income drops to zero but your repayments continue
• Market sensitivity -- rentals are more likely to be sold (often at a loss) during downturns

The good news: the investor premium has narrowed over the past two years as competition between banks intensifies. Some online banks now offer variable rates within 0.15% of their owner-occupied pricing -- always check the comparison rate for both products to confirm the real gap after fees and charges apply.

What Determines Your Home Loan Interest Rate

The advertised rate is a starting point. The rate you actually get depends on several factors specific to your financial situation and the home you're buying.

Loan to Value Ratio (LVR)

Your loan-to-value ratio is the single biggest factor in the rate you're offered. LVR measures how much you're borrowing compared to the value of the home. A $400,000 loan on a $500,000 home gives you an 80% LVR.

Most banks use these LVR tiers for home loan interest rates on rental properties:

LVR Range	Rate Impact	LMI Required?
Below 60%	Best rates -- up to 0.30% discount	No
60-70%	Strong rates -- favourable loan terms	No
70-80%	Standard advertised rates	No
80-90%	+0.10% to +0.30% above standard	Yes
90%+	+0.30% to +0.60% above standard (few banks offer this for rentals)	Yes

If your LVR exceeds 80%, you'll also need to pay lenders mortgage insurance (LMI). On a $500,000 home loan at 90% LVR, LMI can cost $12,000 to $18,000 -- either paid upfront or capitalised into the loan (which increases your ongoing interest charges). Some banks offer an LMI discount as part of their product package, or waive LMI entirely for eligible borrowers in certain professions.

Tip: If you own an existing home with equity, you can use that equity as part of your deposit to bring the new loan's LVR below 80%. A larger deposit means a lower LVR, which unlocks better rates and more favourable loan terms from every bank. Read our guide on how to calculate and use equity in your portfolio for a full walkthrough.

How Rental Income Affects Your Loan Application

Banks treat rental income differently from salary income. Most major banks include 80% of your expected gross rental income in serviceability calculations -- the 20% haircut accounts for vacancy, management fees, and maintenance. If your rental generates $600 per week ($31,200 p.a.), most banks count approximately $24,960 towards your borrowing capacity.

Your rental income also affects your tax position. According to the Australian Taxation Office (ATO), a home is considered negatively geared if the tax-deductible expenses exceed the income earned from it during the financial year. When your home loan interest and other expenses exceed your rental income, you're negatively geared -- and you may be able to claim those losses to offset tax on other sources of income, potentially providing significant tax benefits. Read our negative gearing explained guide for how this strategy works in practice.

Your Borrowing Power and Serviceability

Serviceability is how banks determine whether you can afford your home loan repayments. Under APRA's guidelines, banks assess your ability to repay at a buffer of at least 3% above the loan's interest rate. If the current variable rate is 6.50%, your bank tests whether you can afford repayments at 9.50%.

Factors that strengthen borrowing power: higher income (salary, rental income, dividends), low existing debts, clean credit history, strong credit score, and lower living expenses. See our guide on how much you can borrow for a rental property.

Fixed Rate vs Variable Rate: Which Is Better for Investors?

This is one of the most common questions investors ask. You can choose between fixed rate, variable rate, or split rate home loan products, allowing you to tailor your loan structure to your financial strategy. The right answer depends on your approach, your risk tolerance, and your view on where interest rates are heading over the coming years.

Fixed Rate Home Loans

A fixed rate home loan product locks your interest rate for a set period -- typically one to five years. During the fixed rate period, your repayments stay the same regardless of what happens to the RBA cash rate or market conditions. The fixed loan terms are set when you apply.

Advantages of fixed rate home loans:

• Certainty -- you know exactly what your repayments will be, which makes cash flow forecasting easier
• Protection from rate rises -- if the Reserve Bank raises the cash rate, your fixed rate doesn't change until the fixed period ends
• Budget accuracy -- fixed repayments mean you can calculate your annual holding costs with precision

Disadvantages:

• Break costs -- if you want to exit the fixed rate loan early (to sell, refinance, or switch banks), break fees can be substantial -- sometimes $10,000 to $30,000 depending on the loan balance and the remaining fixed term in years
• Limited features -- most fixed rate home loan products restrict extra repayments (usually capped at $10,000 to $20,000 per year) and don't offer redraw or offset account functionality
• Opportunity cost -- if variable rates fall, you're locked into the higher fixed rate for the full term with no way to benefit unless you pay break costs to refinance

When fixed makes sense for investors:

Fixed rates work best when you want predictable cash flow, when rates are expected to rise, or when you're buying and plan to hold for the full fixed term without refinancing. A fixed rate product is also useful if you need certainty that your repayments won't change during the early years of the loan.

Variable Rate Home Loans

A variable rate loan product moves up or down in response to market conditions -- primarily the RBA cash rate, but also the bank's own funding costs and competitive positioning.

Advantages of variable rate home loans:

• Flexibility -- make unlimited extra repayments, access redraw, and use an offset account to reduce your interest charges
• No break costs -- you can refinance to a different bank or lender, or pay off the loan at any time without penalty fees
• Rate negotiation -- you can call your bank and negotiate a discount on your variable rate, especially if you have a good credit history, solid repayment track record, or hold multiple home loans with them

Disadvantages:

• Uncertainty -- your repayments can increase if the RBA raises the cash rate
• Budgeting difficulty -- harder to forecast expenses when your biggest cost can change monthly

When variable makes sense for investors:

Variable rates suit investors who want flexibility, who plan to make extra repayments from rental income or salary, who want to use an offset account to reduce interest, or who expect rates to fall. If you have strong cash flow buffers and can absorb rate increases, a variable rate home loan product gives you more options and better terms for redraw and offset.

Split Loans: The Best of Both

Many investors split their home loan -- typically 50/50 or 60/40 between a fixed rate portion and a variable rate portion. This gives you repayment certainty on one portion while keeping offset and redraw flexibility on the other. Most banks allow loan splitting at no additional fees, and each portion will have its own comparison rate.

Understanding the Comparison Rate

You'll see two rates advertised for every home loan product: the headline rate and the comparison rate. The comparison rate is designed to help investors understand the true cost of the loan by incorporating most fees and charges -- including establishment fees, ongoing monthly or annual package fees, and discharge charges.

The comparison rate is calculated on a standardised $150,000 loan over 25 years, as required by ASIC. This makes the comparison rate a useful tool for screening loan products, but it has limitations:

• The comparison rate doesn't include everything -- application fees, valuation fees, LMI, and government charges like stamp duty are excluded from the comparison rate calculation
• The standardised amount matters -- if you're borrowing $700,000, the impact of a $395 annual package fee is proportionally much smaller than on a $150,000 loan, so the comparison rate can overstate the fee impact for larger loans
• Package discounts aren't always reflected -- some banks offer rate discounts when you bundle products (credit card, savings account, insurance) as part of a package, but these package discounts aren't always captured in the comparison rate

How to use comparison rates effectively:

Use the comparison rate to screen out loan products with high hidden fees. If a bank's headline rate is 6.19% but its comparison rate is 6.85%, there are significant charges baked in. For the final decision, model the total cost over your expected holding period using actual fees and the rates that apply to your loan amount. The PropBoss loan repayment calculator lets you input your exact loan amount, rate, and term.

How Home Loan Repayments Work on Rental Properties

Your repayment structure has a significant impact on your cash flow, tax deductions, and long-term wealth building.

Interest Only vs Principal and Interest Repayments

Interest-only home loan products allow borrowers to pay only the interest for a set period (typically five years), which can help manage cash flow in the short term but may lead to higher overall interest costs compared to principal and interest repayments. With interest only repayments, you don't reduce the loan balance. With principal and interest repayments, each payment covers the interest plus a portion of the loan itself.

Example on a $500,000 loan at 6.50%:

Repayment Type	Monthly Payment	Annual Payment	Loan Balance After 5 Years
Interest only	$2,708	$32,500	$500,000 (unchanged)
Principal & interest	$3,161	$37,929	$459,176
Difference	$453/month	$5,429/year	$40,824 less equity

Interest only home loan repayments are popular with investors because:

• Lower monthly outgoings improve cash flow -- important if the rental is negatively geared
• Higher tax deductions -- the full repayment is interest, which is tax-deductible for rentals
• Capital allocation -- the $453 per month saving can be directed to an offset account against your non-deductible home loan, reducing non-deductible interest charges

However, interest only loans carry risks. Your loan balance doesn't decrease, and when the interest only period ends (typically 5 years), your home loan repayments jump significantly as you repay principal over a shorter remaining term.

Read our detailed comparison in interest only loans for investors: how they work.

Home Loan Interest Tax Deductions

The interest you pay on your home loan is tax deductible when the loan relates to the income-producing rental. If you refinance and draw additional funds for personal use, the interest on that portion is not deductible. See the ATO's guidance on rental expenses and our tax deductions guide for details.

How to Get the Best Home Loan Rate

The difference between 5.99% and 6.69% on a $600,000 loan is over $260 per month. Over 30 years, that adds up to more than $93,000 in extra interest. Here's how to secure the best rate on the most favourable loan terms.

Using a Mortgage Broker

A mortgage broker compares home loan products across 20 to 40 banks and lenders -- including online banks, non-bank lenders, and credit unions you might not find yourself. A good mortgage broker knows which banks offer the best comparison rates and package discounts, and which will approve complex structures like trust or company borrowers.

Key benefits of using a mortgage broker:

• Access to bank panel pricing and comparison rates not publicly advertised
• Help structuring loans across multiple properties (avoiding cross-collateralisation)
• Pre-approval guidance so you can apply with confidence and get the best terms
• Fee-free service -- your mortgage broker is paid by the bank, not by you
• Product comparison of package deals, offset account options, and fee structures

Tip: Ask your mortgage broker specifically about rates and comparison rates for rental home loans. Some brokers focus on owner-occupied lending and may not be across the best investor-specific deals or product discounts.

Negotiating a Lower Rate with Your Bank

If you already have a home loan on a rental, calling your bank to negotiate a lower variable rate is one of the highest-value financial conversations you can have. Banks have retention teams whose job is to keep you -- and they have discretion to offer discounts.

Before you call your bank:

1. Research competitor rates -- know what ING, Athena, or Macquarie are offering, including their comparison rates
2. Know your LVR -- if your home has grown in value, your LVR may have dropped, qualifying you for a better rate tier
3. Check your payment history -- a clean record of on-time home loan repayments strengthens your position
4. Mention refinancing -- if your bank knows you're genuinely considering switching to a different bank or lender, they're more likely to offer a meaningful discount
5. Ask about package eligibility -- you may be eligible for a package discount if you hold other products with the bank, or if you consolidate multiple home loans

Many investors have successfully negotiated 0.20% to 0.50% off their variable rate with a single phone call. On a $500,000 home loan, a 0.30% discount saves $125 per month -- $1,500 per year in reduced repayments.

Features That Reduce Your Home Loan Interest

Beyond the headline rate, certain loan features can significantly reduce the total interest you pay:

Offset account: An offset account is a transaction account linked to your home loan. If you have a $500,000 loan and $50,000 in offset, you only pay interest on $450,000 -- saving $3,250 per year at 6.50%. Offset accounts are typically available on variable rate home loans or package loans, not most fixed rate loans.

Extra repayments: On a $500,000 loan at 6.50%, an extra $200/month saves over $85,000 in interest and cuts the loan term by almost 5 years. Variable rate home loans usually allow unlimited extra repayments, while fixed rate loans often cap them at $10,000 to $20,000 per year.

Redraw facility: A redraw facility lets you withdraw extra repayments you've made if you need them later. The ATO treats redrawn funds based on their new purpose, so personal redraw can reduce deductibility on that portion. An offset account avoids this redraw issue.

How the RBA Cash Rate Affects Home Loan Rates

The Reserve Bank of Australia sets the official cash rate, which directly influences what banks charge for home loans. When the RBA raises the cash rate, banks typically pass the increase through to variable rate borrowers within days. When the RBA cuts, banks pass on some or all of the reduction -- though they've historically been slower to pass on cuts than increases.

As of April 2026, the RBA cash rate sits at 3.85% after cuts from the 2024 peak of 4.35%. Most economists expect the RBA to hold through mid-2026, with potential for one more cut later in the year.

What this means for home loan rates on rentals:

• Variable rate home loans should remain relatively stable for the next 6-12 months
• Fixed rate home loans may offer a small discount over variable rates if markets are pricing in further cuts
• If you're on a variable rate, this is a good time to negotiate a discount with your bank -- banks are competing aggressively for refinance business

For context: variable rates peaked at around 7.20% in late 2024 and have since dropped to the 5.99%-6.69% range. Investors who locked in 2-year fixed rates at 5.49% in early 2025 are currently paying less than the market variable rate.

RBA rate history and rental property impact (2022-2026):

Date	Cash Rate	Avg Variable Rate	Change
April 2022	0.10%	2.89%	Pre-hike baseline
June 2022	0.85%	3.64%	Hiking cycle begins
November 2023	4.35%	7.09%	Peak rate
February 2025	4.10%	6.84%	First cut
April 2026	3.85%	6.59%	Current

Investors who survived the hiking cycle saw home loan repayments increase by over 60%. The key lesson: rates are cyclical. Model your numbers at both current rates and a stress rate of 2-3% higher to ensure you can withstand future variable rate increases.

Worked Example: Home Loan Repayments at Different Rates

Say you're purchasing a $650,000 apartment in Brisbane as a rental. You have a 20% deposit ($130,000), so your loan amount is $520,000 with an 80% LVR -- making you eligible for standard rates from most banks without LMI fees.

Scenario comparison at different interest rates on a 30-year fixed or variable loan term:

	Rate: 5.99%	Rate: 6.39%	Rate: 6.69%
Monthly P&I repayment	$3,114	$3,248	$3,349
Monthly IO repayment	$2,597	$2,769	$2,899
Annual interest cost	$31,148	$33,228	$34,788
Total interest (30-year P&I)	$601,090	$649,155	$686,614

The difference between the cheapest and most expensive rate is $235 per month, or $2,820 per year. Over 30 years, you pay $85,524 more in total interest at 6.69% compared to 5.99%. If Brisbane rental yields average 4.8% gross ($600/week), a 5.99% interest-only loan product costs $31,148 per year -- nearly neutral. At 6.69%, you'd need $669/week, pushing into negative gearing territory.

PropBoss handles this automatically -- the loan repayment calculator models different rate scenarios across your entire portfolio.

Home Loan Fees and Charges to Watch

Interest rates get all the attention, but fees can materially change the true cost of your home loan. Check these charges before choosing a loan product:

Upfront fees: - Application/establishment fee: $0 to $600 - Valuation fee: $0 to $300 (often waived for LVR below 80%) - Settlement fee: $0 to $350

Ongoing fees: - Annual package fee: $0 to $395 (common on "package" loan products that bundle a discount) - Monthly service fee: $0 to $10 (increasingly rare)

Exit fees: - Discharge fee: $150 to $350 - Break costs (fixed rate only): can be thousands of dollars -- early exit fees apply - Deferred establishment fee: rare but worth checking in the fine print of your loan terms

Package loans need a quick break-even check. A 0.15% discount saves $750 per year on a $500,000 loan, which covers a $395 annual package fee. On a $200,000 loan, the same discount saves $300, so the fee can outweigh the rate benefit. Compare the comparison rate on both package and basic products before accepting the discount.

Refinancing Your Home Loan for a Better Rate

If you took out your home loan two or more years ago, there's a good chance you're paying more than you need to. Banks reserve their best rates for new customers -- a practice known as the "loyalty tax." The Reserve Bank has estimated that existing borrowers pay an average of 0.40% to 0.50% more than new borrowers with equivalent risk profiles and credit history.

Refinancing your home loan means replacing it with a new loan product from a different bank -- giving you access to a better variable rate, lower fees, or features like an offset account and redraw that your current bank may not offer. Here's what to consider:

When refinancing makes sense:

• Your current variable rate is more than 0.30% above the best available rate for your LVR -- compare comparison rates to confirm the gap after fees apply
• Your fixed rate period has ended and you've reverted to a higher variable rate with your current bank
• You want features your current loan doesn't offer (offset account, redraw facility, split loan)
• Your home has increased in value, lowering your LVR and making you eligible for better terms from another bank
• You want to consolidate multiple home loans with one bank for simpler management and a better package discount

When refinancing may NOT make sense:

• You're on a fixed rate home loan with significant break costs remaining
• The savings are minimal (less than 0.15% over a short remaining loan term) -- check the comparison rate difference, not just the headline rate
• You have complex loan structures (trust, company borrower) that limit which banks can accommodate you
• You're planning to sell within the next 12 months

The refinancing process:

1. Compare rates -- check comparison rates from at least 3-4 banks for your specific LVR and loan amount
2. Get a valuation -- your new bank will value the home to determine your LVR
3. Apply -- provide income evidence, rental statements, and existing home loan details
4. Settlement -- the new bank pays out your old loan and establishes the new one (typically 4-6 weeks)

Refinancing charges typically run $500 to $1,500 in total (discharge fee from your old bank, application fee from the new bank, and government registration fees apply). On a $500,000 home loan where you save 0.35% p.a., that's $1,750 per year in savings -- paying back the switching costs within the first year. A mortgage broker can handle the entire refinance process for you at no charge.

Our full guide covers this in detail: should you refinance your rental property loan?

Common Mistakes Investors Make with Home Loans

After working with thousands of Australian investors, we see the same costly mistakes repeatedly:

1. Focusing only on the headline rate instead of the comparison rate

The cheapest headline rate doesn't always mean the cheapest loan product. A loan at 5.99% with a $395 annual package fee and no offset account may cost you more than a 6.19% product with a full offset where you park $30,000. The comparison rate tells a more complete story -- always compare the comparison rate across banks, and calculate total cost including fees, charges, features, and the terms of your loan.

2. Cross-collateralising rental properties

When you use one home as security for another home loan (both with the same bank), you create cross-collateralisation. This ties your properties together and limits your flexibility -- if you want to sell one, the bank may require a revaluation of the entire portfolio before releasing security.

3. Not reassessing after the fixed rate period ends

When your fixed rate period expires, most banks automatically move you to their standard variable rate -- which is almost always higher than the best available variable rate. Set a calendar reminder for 3 months before your fixed rate expires to start shopping for a better deal. Use a mortgage broker or compare comparison rates yourself to find the most competitive loan product before you revert to a higher rate.

4. Ignoring the impact of rate changes on portfolio cash flow

A 0.50% variable rate increase across a portfolio of three rental properties (total lending $1.5 million) adds $625 per month to your home loan repayments. Many investors don't model the portfolio-wide impact of rate movements -- this is where a clear portfolio view becomes critical.

5. Choosing interest only without a strategy

Interest only home loan repayments should be part of a deliberate strategy -- not a default choice. If you're using IO to redirect savings into an offset account against your non-deductible home loan, that's a valid tax strategy. If you're using IO because you can't afford P&I repayments, you may be overleveraged.

Investment Loans Checklist for Property Investors

Before you apply, compare investment loans on more than the advertised rate. Good investment loans need to match the way property investors hold assets, collect rent, manage tax records, and refinance when a better deal appears. A low-rate product can still be the wrong investment home loan if it limits offset access, restricts extra repayments, or prices future top-ups poorly.

Investment Home Loan Rates and Loan Interest Rates

Investment home loan rates should be compared against the loan interest rates that apply to your exact borrower profile. Ask each lender or mortgage broker for the variable interest rate, the fixed interest rate, the applicable variable interest rate after any introductory discount ends, and the comparison rate for your loan amount. That gives you a cleaner view of whether the interest rate discount is real or whether fees remove the cost savings.

Property investors should also ask whether the same investment home loan rates apply to new loans, existing loans, new investment loans, and refinanced investment property loans. Some banks advertise sharp loan interest rates for new investment loans but leave existing property borrowers on older pricing unless they request a review.

Value Ratio LVR and Owner Occupier Loans

The value ratio LVR tier can change the rate materially. At 60% LVR, a lender may offer its strongest discount. At 80% LVR, the same investment mortgage may move to standard pricing. Above 80%, lenders mortgage insurance, a higher variable interest rate, and stricter credit assessment can all apply.

Borrower type matters too. Individual borrowers, company and trust borrowers, and land loan or construction loans can receive different pricing. Owner occupier loans and owner occupier home loans usually sit on a cheaper rate card than investment property home loans because the lender treats an owner occupied home loans application as lower risk.

Fixed Rate Investment Loan Suitability

This structure can suit a borrower who wants certainty over monthly repayments and does not expect to refinance quickly. Check the fixed rate period, early repayment fees, break costs, and whether extra repayments are capped. Fixed pricing can make sense when rental income comfortably covers interest repayments, but it can be expensive if your personal circumstances change before the loan settlement date or before the fixed rate period ends.

Pre Approval and Final Loan Contract

Pre approval is useful, but it is not the final loan contract. Before signing, review the loan contract for the loan package fee, offset account rules, redraw facility limits, principal and interest repayments, interest only repayments, and whether everyday offset account access is included. If anything is unclear, seek independent advice before settlement.

For an investment home loan application, the lender will usually test rental income, property value, borrowing capacity, debt to income ratio, credit history, and the full financial situation. The more clearly you can document those items, the easier it is to compare eligible home loan options and avoid being pushed into a loan compared poorly against cheaper alternatives.

Home Loan Features Compared

Not all home loans are equal. Investors should compare the variable rate, comparison rate, features, fees, and loan terms across bank types:

• Big 4 banks: variable rates around 6.49%-6.79%, package-based offset accounts, unlimited extra repayments on variable loans, branch access, and typical turnaround of 2-4 weeks
• Online banks: variable rates around 5.99%-6.39%, usually faster 1-2 week turnaround, no branch access, and offset/redraw features that vary by lender
• Non-bank lenders: variable rates around 6.19%-6.99%, fastest credit assessment in some cases, but offset, redraw, and split-loan options vary more widely

For investors building a portfolio, the big four banks may offer relationship pricing and package discounts once you have two or more home loans. But for a single rental, online banks like Athena, Ubank, or ING typically offer the lowest rates and comparison rates with adequate features -- including offset accounts, redraw, and unlimited extra repayments.

How to Apply for an Investment Home Loan

Once you've compared rates, loan products, and bank terms, prepare the application before you submit.

Step 1: Get Pre-Approval

Pre-approval tells you how much a bank may lend, at what rate, and on what terms. Most pre-approvals last 90 days to 6 months and include an initial credit assessment of your credit history, income, and existing debts.

Step 2: Prepare Your Documentation

When you apply for a home loan, banks require documentation as part of their credit assessment. Standard requirements include:

• Income verification -- two to three years of tax returns, recent payslips, or an accountant's letter
• Existing debts -- statements for current home loans, personal loans, or credit card limits (even unused credit limits reduce borrowing power)
• Asset statements -- bank account balances, offset account balances, and share portfolios
• Rental income evidence -- a lease agreement or rental appraisal for the home you're buying
• Deposit evidence -- bank statements showing your deposit saved over at least three months
• Identification -- 100 points of ID as required under anti-money-laundering terms

Step 3: Choose Your Loan Product and Terms

Decide on fixed or variable, interest only or principal and interest, loan term, offset account, redraw, and package versus basic product before you apply. Your mortgage broker can compare the comparison rate, fees, and terms side by side.

Step 4: Bank vs Mortgage Broker -- Where to Apply

You can apply directly with a bank or through a mortgage broker. Direct applications limit you to one bank's product range; a broker can compare 20-40 banks, identify faster credit assessment paths, and apply at no cost to you because the bank pays the broker's fee.

Step 5: Apply Online or In Branch

Most online applications take 30-60 minutes. Some banks issue conditional approval within 24-48 hours; full credit assessment, valuation, and formal approval typically take 2-4 weeks. For current rate comparisons, see our investment loan rates. For current rate comparisons, see our investment property mortgage rates.

FAQs About Investor Home Loan Rates

Are rental property interest rates higher than home loan rates?

Yes. Rental property interest rates are typically 0.25% to 0.60% higher than equivalent owner-occupier home loan rates. This premium reflects the higher risk that APRA and banks assign to this type of lending. The gap has been narrowing in 2026, with some online banks offering rates within 0.15% of owner-occupied pricing.

Can I deduct home loan interest on my tax return?

Yes -- interest on your home loan for a rental is generally tax-deductible against rental income each financial year. You can only claim the interest component, not the principal portion of P&I repayments. The home must be rented or genuinely available for rent to claim the deduction.

Should I fix or go variable on my loan?

Choose fixed if repayment certainty matters most. Choose variable if you value offset access, redraw, extra repayments, and easier refinancing. Many investors split their home loan 50/50 to combine certainty with flexibility.

How much higher are rates for interest only home loans?

Interest only home loan products typically carry a rate premium of 0.05% to 0.20% above the equivalent principal and interest rate. On a $500,000 home loan, a 0.10% IO premium adds about $42 per month. IO repayments are lower month-to-month, but total interest paid over 30 years is higher.

How do I compare home loans from different banks?

Start with the comparison rate, not the headline rate. Then check offset account access, extra repayments, redraw, loan splitting, package discounts, and approval speed. Model the total cost using your actual loan amount and expected holding period.

Can I get a loan with less than 20% deposit?

Yes, but additional fees apply. With less than a 20% deposit, you'll usually pay a higher interest rate plus lenders mortgage insurance. LMI on a $500,000 loan at 90% LVR can cost $12,000 to $18,000, so getting to 80% LVR can materially improve the deal.

What LVR do I need for the best rates?

The best rates are typically available at LVR of 60% or below -- these borrowers get the "sweet spot" pricing with discounts of up to 0.30% off standard rates from most banks. The most common LVR tier is 70-80%, which gets standard advertised rates. Above 80% LVR, you'll pay a premium on the rate plus lenders mortgage insurance charges apply. For most investors, targeting 80% LVR or below with a 20% deposit is the best balance between leverage and rate.

Is there a tool that automates loan tracking?

PropBoss tracks repayments, interest costs, and cash flow across your portfolio. The loan repayment calculator models rate scenarios, and the dashboard shows how rate changes affect your cash position. $1/property/month. Start your free trial.

Start Optimising Your Home Loan Rate

The difference between a good and average interest rate can cost you tens of thousands of dollars over the life of a loan. Whether you're comparing comparison rates for a new purchase, negotiating a discount on your existing home loan, deciding between fixed rate and variable rate, or working with a mortgage broker to refinance on better terms, the numbers matter.

Stop managing home loan repayments in spreadsheets. PropBoss tracks every dollar of interest across your portfolio automatically -- with bank feeds, tax-ready reports, and scenario modelling built in.

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Use our loan repayment calculator to compare rates and repayment scenarios for your specific situation.