Investment Loans in Sydney

Building a property portfolio in Sydney is one of the most powerful wealth-creation strategies available to Australians — but the finance behind it needs to be just as strategic as the properties themselves. Whether you're purchasing your first investment property, refinancing to unlock equity, or expanding a portfolio across multiple assets, the right investment loan structure can make the difference between an investment that grows your wealth and one that constrains it.

At RyRo Loan Centre, we're Sydney's specialist investment mortgage brokers. We give you access to a panel of 30+ lenders, structure loans for portfolio scalability, and help you maximise tax efficiency — from your first purchase through to a portfolio of five, ten, or more properties.

Variable from ~5.79% p.a. | Up to 90% LVR | Interest Only Available | Fixed & Variable Options

An investment property loan — also called an investor home loan — is a mortgage specifically designed for purchasing residential or commercial property that you intend to rent out rather than live in yourself. Because the income generated by the property is a primary source of loan repayment, lenders assess investment loans differently from standard owner-occupier mortgages.

Investment loans are used to purchase a wide range of asset types: houses, units, townhouses, apartments, duplexes, granny flats, new builds, land and construction, and commercial properties. They can be structured as variable rate, fixed rate, or split loans, with repayment options ranging from principal and interest to interest-only periods of up to five years.

In Australia, investment loans are subject to the same regulatory framework as owner-occupier home loans, but with key differences in pricing, servicing assessment, and tax treatment. The interest you pay on an investment loan is generally tax-deductible against rental income — and where expenses exceed income, this creates negative gearing, which can further reduce your overall tax liability.

Sydney is Australia's most sought-after residential property market. Strong long-term capital growth, a deep rental market, infrastructure investment and consistent population growth make it a natural target for property investors at every stage.

Investment property loan rates in Australia are at competitive levels following RBA cash rate moves. Investor rates are typically priced slightly higher than equivalent owner-occupier rates — the RBA's data shows the average variable investor rate sits approximately 0.25% above the average owner-occupier variable rate.

As of early 2025, indicative investment loan rates range as follows:

Rates are indicative only and subject to change. Actual rates depend on LVR, lender, property type, repayment type, loan amount and your circumstances. General guidance only, not financial advice.

Key factors that affect your investment loan rate:

• LVR: Loans at 60% LVR or below typically access the best pricing. Above 80% LVR triggers higher rates and may require LMI.
• Repayment type: Interest-only is typically 0.25–0.50% higher than equivalent P&I.
• Fixed vs variable: Fixed gives certainty but less flexibility; variable allows extra repayments and offset.
• Lender type: Major banks offer competitive baseline rates; non-bank specialists offer greater flexibility at a modest premium.
• Loan amount: Larger loans (e.g. above $1M) sometimes attract rate discounts.
• Your profile: Income stability, credit history, existing debt and net assets all influence the rate.
• Property location and type: Metro Sydney is viewed more favourably than regional or unusual asset types.

Banks do not publish their best investor rates — they are negotiated. Your broker's lender relationships, application quality and ability to create competitive tension directly influence the rate you pay.

Standard Variable Rate Investment Loans

The most common and flexible structure. Variable rate moves with RBA and market conditions. Typically includes offset accounts, unlimited additional repayments, redraw and the ability to split into fixed and variable. Best for investors who want flexibility — extra repayments, offset, or refinance without break costs.

Fixed Rate Investment Loans

Lock in your rate for 1, 2, 3 or 5 years. Repayments are predictable; budgeting and cash flow modelling are simpler. Trade-off: fixed loans typically restrict extra repayments (e.g. $10,000 per year cap) and attract break costs if you exit early. They generally don't include offset (some lenders offer partial offset on fixed).

Split Investment Loans

Divide your borrowing into a fixed component and a variable component (e.g. 60% fixed for certainty, 40% variable with offset). Balances predictability with flexibility.

Interest-Only Investment Loans

Pay only the interest for a set period (typically up to 5 years). Lower initial repayments; the entire repayment during IO is interest — and interest is tax-deductible, maximising deductions. Example: $600,000 at 6.5% p.a. IO ≈ $3,250/month vs ~$3,790 P&I over 30 years. Trade-offs: at end of IO, repayments jump when P&I starts; you make no principal progress during IO; IO rates are slightly higher; APRA scrutiny means IO is generally only available at LVR 80–90% or below. We model IO vs P&I against your tax position and strategy.

Principal & Interest Investment Loans

Repayments cover interest and principal; loan balance reduces over time and total lifetime interest is lower. Often recommended for lower tax brackets, long-term buy-and-hold investors, and when you want the strongest serviceability assessment (P&I is generally assessed more easily than IO).

Investment Construction Loans

For land and build or significant renovation. Drawn down in stages as milestones are reached; interest is charged only on the amount drawn, reducing interest during construction. Popular for maximising yield, claiming depreciation on a new build from day one, or building in high-demand suburbs.

Investment Refinancing

Refinancing can deliver a lower rate, access to equity from capital growth, a switch to a lender with better servicing policies, or a restructure from P&I to IO (or vice versa). Many Sydney investors sit on significant equity; refinancing unlocks it as a tax-effective deposit for the next purchase. We model the full cost of switching (discharge fees, new establishment, valuation) against the rate saving and equity benefit.

Portfolio Lending (Multiple Properties)

Building a multi-property portfolio requires a different approach. Key principles: avoid cross-collateralisation (linking multiple properties as security with one lender limits your ability to sell or refinance individually); spread across lenders (each bank has different servicing models — we match each purchase to the lender most likely to approve on the best terms); maximise LVR strategically; and plan for the DTI environment (from 1 Feb 2026, APRA caps new investor loans at 6× income or more to no more than 20% of new lending — we model this for high-DTI investors).

Equity Release for Investment Deposit

You don't need a cash deposit in the bank. If you own a home or existing investment with sufficient equity, you can access it via a top-up or line of credit to fund the deposit for your next purchase. The equity loan is tax-deductible when the funds are used to purchase an income-producing investment property (ATO guidelines). Usable equity is typically (80% of current value) minus existing loan balance. We run this calculation and structure the access so it doesn't destabilise your existing financing.

Negative gearing is central to the financing strategy of hundreds of thousands of property investors. The ATO has confirmed it remains a legal and effective tax strategy under current law.

What is negative gearing? A property is negatively geared when total deductible expenses (mortgage interest, property management, council rates, landlord insurance, repairs, depreciation) exceed rental income. The net rental loss can be offset against other taxable income (e.g. salary), reducing the income on which you pay tax. This is not a cash refund — it's a reduction in what you owe.

Simple example: You earn $120,000 salary. The investment generates $25,000 rent and $35,000 in deductible expenses — net loss $10,000. You are taxed on $110,000 instead of $120,000.

Deductible expenses (ATO guidelines): Interest on the investment loan; property management and letting fees (often 7–10% of gross rent); council rates and water; landlord insurance; repairs and maintenance (not capital improvements); strata/body corporate; land tax; pest control and cleaning; advertising for tenants; accountant fees for the investment; depreciation — Division 43 (building, 2.5% p.a. for post-1987) and Division 40 (fixtures and fittings). Depreciation is a non-cash deduction; a quantity surveyor's schedule (typically $500–$800, itself deductible) can deliver $5,000–$15,000 per year in deductions for a new Sydney property.

CGT and the 50% discount: When you sell, any capital gain is subject to CGT. If you held the property more than 12 months, only half the capital gain is included in taxable income in the year of sale — a major benefit for long-term investors.

Who benefits most: High-income earners in the 37% and 45% marginal tax brackets benefit most. Lower-income earners still benefit but proportionally less. If strong monthly cash flow is the goal, positive gearing (rent exceeds expenses) may be more appropriate.

Positive gearing: A positively geared property generates rental income in excess of deductible expenses. The net profit is added to taxable income. It improves cash flow and may suit those seeking income over growth or in lower tax brackets. We model both gearing scenarios with your tax position and objectives.

As of 2025–26 no federal changes to negative gearing have been enacted. Seek current tax advice from a qualified accountant.

1. Serviceability and borrowing capacity Lenders assess total income vs total debt and apply a serviceability buffer of 3 percentage points above the loan rate (APRA). So if your rate is 6.2%, they test at 9.2%. Rental income is typically "shaded" to 70–80% by most lenders (only a portion counts). Existing debts — home loans, other investments, credit cards, personal loans, HECS — are all included. Lender selection matters: some are more generous with rental shading and servicing models.

2. Deposit and LVR Most investment loans need 10–20% deposit. Above 80% LVR usually requires LMI (significant upfront cost). Many investors keep LVR at or below 80%, often using equity from an existing property to avoid LMI. Max LVR varies by lender; most major banks cap at 80% (sometimes 90% with LMI). Non-bank specialists may go higher in limited cases.

3. Rental income evidence For tenanted properties: lease agreement and rental history. For vacant or new: projected market rent (property manager appraisal or valuation).

4. Credit history A clean credit file is important. Defaults, judgments or many credit enquiries can impair access to competitive rates. A score above 680–700 is preferred by most lenders for investors.

5. Employment and income PAYG: recent payslips and group certificate/ATO income statement. Self-employed: two to three years tax returns, business financials, BAS. Low doc options exist for self-employed who can't provide full documentation.

6. APRA's DTI cap (from 1 February 2026) ADIs cannot issue more than 20% of new investor loans to borrowers with DTI of 6× or more. Currently only around 10% of new investor loans breach this, so most borrowers are unaffected. High-DTI investors in Sydney — especially with multiple properties — should model this with their broker. Non-bank lenders are not subject to the DTI cap and can be an alternative.

Offset account A transaction account linked to your investment loan. Every dollar in the offset reduces the balance on which interest is calculated (e.g. $600k loan, $50k in offset = interest on $550k). The money remains accessible. Offsets are tax-effective because they reduce interest without reducing the principal — preserving deductibility of the full loan amount.

Redraw facility Access to extra repayments you've made. For investors, redraw must be used carefully: if funds are redrawn for personal (non-investment) use, the interest on that portion may no longer be tax-deductible. Keep a clear, documented purpose for any redraw (ATO compliance).

Split loan structure Most lenders let you split the investment loan into fixed and variable (or IO and P&I) components for customised repayment and tax strategies.

Cross-collateralisation: understand the risks When multiple properties secure one or more loans with the same lender, the lender has control over multiple assets. Selling one property may need lender approval; LVR is blended across properties (one fall in value can affect the whole facility); you're tied to one lender; IO access may be restricted. For serious portfolio investors, standalone security — each property securing its own loan, ideally across multiple lenders — gives maximum flexibility, control and scalability.

Variable vs fixed for investment? No single right answer. Fixed: best when you want certainty, will hold for the fixed term, don't need big extra repayments, and want protection from rate rises (often chosen for negatively geared properties). Variable: best when you want flexibility — extra repayments, offset, refinance without break costs. Split: a middle ground; many experienced investors use a mix.

Standard requirements for a residential investment loan include:

Personal identification: Passport and/or driver's licence (photo ID).

Income (PAYG): Two most recent payslips; most recent group certificate or ATO income statement; if bonus income: two years payslips and employer confirmation.

Income (self-employed): Last two years individual and business tax returns; last two years business financials (P&L, balance sheet); last four BAS; ATO Notices of Assessment for last two years.

Assets and liabilities: Three to six months bank statements (all accounts); most recent mortgage statements for existing properties; council rate notices; super statements; other assets (shares, vehicles); credit card and personal loan schedules.

Property documents: Signed contract of sale (purchases); current lease and rental history (tenanted); rental appraisal from property manager (vacant or new); building and pest reports; body corporate levy schedule (units/apartments).

Investment lending is more complex than owner-occupier lending. Lender differences on rental shading, cross-collateralisation, interest-only terms and serviceability mean the right lender for you is not always the one with the lowest advertised rate.

• Wide lending panel. Major banks, regional banks and specialist non-bank lenders all have different products, policies and risk appetites. A broker accesses all of them.
• No cost to you. Brokers are paid by the lender upon settlement. No cost for strategy, application, negotiation or ongoing service.
• Protection of your credit file. Multiple direct applications mean multiple credit enquiries, which can reduce your score. A broker submits one targeted application to the right lender.
• Tax-efficient structuring. We help model IO vs P&I, identify the right security structure for portfolio growth, and flag issues that could affect deductibility before you apply.
• Portfolio strategy. We help you understand borrowing capacity trajectory, which lenders work best at which stage, and how to structure each purchase so you can buy the next one.
• Ongoing management. We review your loans annually, flag refinancing opportunities and help restructure as your portfolio and circumstances evolve.

We arrange investment loans for a broad range of residential property types across Sydney and surrounds:

• Houses — standalone dwellings in all Sydney suburbs (eastern, inner west, northern beaches, Hills District, Western Sydney, Sutherland Shire)
• Units and apartments — including high- and low-density, off-the-plan (some lenders restrict high-density postcodes)
• Townhouses and terraces
• Duplexes and dual occupancy — strong yield and depreciation characteristics
• Granny flats and secondary dwellings — popular yield-boosting strategy
• New builds — off-the-plan in major Sydney precincts
• Land and construction — house and land packages, project homes
• Holiday homes and short-term rental — lenders may require rental income history rather than projected short-stay income

We also arrange investment loans for commercial property: offices, warehouses, retail, medical suites and industrial. If your target doesn't fit neatly into these categories, speak to us.

Sydney remains Australia's largest and most liquid residential property market. CoreLogic data shows long-term average annual growth in excess of 7% over the past decade despite cycles of correction and recovery. Demand drivers — population growth, immigration, constrained land supply, infrastructure and a globally significant economy — underpin long-term investor confidence.

In the September 2025 quarter, investors accounted for approximately two in every five new home loan commitments nationally — the highest level since the pre-APRA intervention period. This was driven by falling interest rates improving serviceability, strong rental yields in Sydney and confidence in long-term capital growth. The investor lending market reached a record of just under $40 billion in that quarter (18% increase in three months) before APRA introduced the DTI cap in February 2026 as a precautionary measure.

Sydney's rental market remains tight across most suburbs, supporting rental yield growth. Many suburbs now offer gross yields that compare more favourably against prices than in the past decade. The current environment combines improving serviceability (from rate moves), strong yields and capital growth fundamentals with regulatory discipline that prevents overleveraged conditions.

RyRo Loan Centre is an authorised credit representative. This page provides general information only and does not constitute financial or tax advice. Speak with a qualified financial adviser and accountant before making investment or tax decisions. Loan approval is subject to lender assessment, individual circumstances and applicable lending criteria. Interest rates, LVRs and regulatory requirements are subject to change.