If you're a detective, your investment loan approval comes down to how a lender counts your income, your rent and your existing debts. Get those three right before you apply and you give yourself a strong chance of a clean result.
Shift work, overtime and allowances can make your pay look different from one fortnight to the next. Lenders treat each of these differently, so it pays to know where you stand before anyone runs the numbers.
How Do Lenders Assess an Investment Loan Application?
Lenders check whether you can afford the repayments, not only at today's rate but at a higher one. Banks regulated by APRA must test new borrowers at a rate at least 3.0 percentage points above the loan's actual rate, a buffer APRA confirmed in May 2026.
They also look at your other debts. Credit card limits count, even if you pay the card off each month, because lenders apply a notional repayment based on the limit. A detective with two or three unused cards can lose borrowing power without ever carrying a balance. Closing cards you don't use before you apply is a straightforward fix, though it does mean giving up that line of credit.
To see where you land, try our borrowing capacity page.
How Much Rental Income Will a Lender Count?
Lenders generally count no more than 80 per cent of the expected rent on an investment property. APRA's guidance suggests a minimum 20 per cent haircut to allow for periods when the property sits empty.
The haircut is about vacancy only. It doesn't cover agent fees, repairs or council rates, so those still come out of your own pocket. Lenders also tend to put less weight on a rental appraisal than on rent actually being received, so a property with a tenant already in place can be easier to assess than one that's empty. What evidence each lender accepts differs, so ask before you sign a contract.
Does Interest Only Help You Borrow More?
No. Choosing interest only does not increase your borrowing capacity. APRA expects lenders to assess interest-only loans on principal and interest repayments over the remaining term after the interest-only period ends.
As an example, a 30-year loan with a 5-year interest-only period is assessed over the remaining 25 years. Using an illustrative rate of 6.75% p.a. on a $500,000 loan, interest-only repayments would be about $2,813 a month. Once principal and interest begin over 25 years at the same rate, repayments would be about $3,455 a month. That is a jump of roughly $640 a month, and the loan balance hasn't dropped in the meantime.
The trade-off is clear. You get lower repayments early, but you pay off none of the debt during that period. Our interest only loans page explains how the structure works.
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Book a chat with a Finance and Mortgage Broker at Blue Loans today.
When Is Lenders Mortgage Insurance Required?
Lenders mortgage insurance is generally required when your loan is more than 80 per cent of the property's value. That 80 per cent line is lender policy, not a legal limit on how much you can borrow.
Borrowing above it needs approval from both the lender and the insurer. The premium is paid by you and depends on the loan amount and the loan to value ratio. Some lenders offer LMI waivers for certain professions, but eligibility and terms vary by lender, so check before assuming it applies. Our pages on LMI waivers and no LMI loans cover the options.
Using Equity From Your Home to Fund the Deposit
If you already own a home, you may be able to borrow against its equity to fund an investment deposit. Each lender sets its own limits on how much equity it will release.
Consider a detective who owns a home and wants a first investment property. Their broker checks how much equity a lender will release and structures it as a separate loan split, so the investment borrowing is kept apart from the home loan. The outcome is that the deposit comes from equity rather than savings, and the interest on that split can be tracked cleanly for tax purposes.
The risk is that you're now borrowing against your own home to buy another property. If rents fall or rates rise, both properties are on the line. Our equity release loans page goes into more detail.
What Changed for Negative Gearing in 2026?
For established properties bought after 7:30pm AEST on 12 May 2026, net rental losses will only be deductible against other residential property income from the 2027-28 income year. Properties held at that time, and eligible new builds, keep the current treatment.
This doesn't change whether the interest on your loan is deductible. It changes how a loss can be used. Properties acquired between that date and 30 June 2027 can still be negatively geared under current rules until 30 June 2027 only. Only the interest part of a repayment is deductible, not the principal. Speak with your accountant about how this applies to you, as outcomes depend on your own circumstances.
Is Refinancing an Existing Investment Loan Worth It?
Refinancing can make sense when your current lender's rate or features no longer suit you, but it comes with costs. Discharge fees, valuation fees and other charges vary by lender, so weigh them against what you'd save.
See our investment loan refinancing page, or ask for a loan health check to see where your loan sits.
Call one of our team or book an appointment at a time that works around your roster. We'll look at your income, your rent figures and your debts, then line up your investment loan options before you apply. You can also book an appointment online.
Frequently Asked Questions
How much rent do lenders count on an investment property?
Lenders generally count no more than 80 per cent of expected rent, in line with APRA's guidance on allowing for vacancy. Each lender sets its own rules on what rental evidence it accepts.
Does an interest-only loan increase how much I can borrow?
No. Lenders assess interest-only loans on principal and interest repayments over the remaining term after the interest-only period. This means borrowing capacity doesn't increase.
When do I need lenders mortgage insurance?
It is generally required when your loan is more than 80 per cent of the property's value. That threshold is lender policy rather than a legal limit, and the premium is paid by the borrower.
Are unused credit cards counted in an investment loan application?
Yes. Lenders apply a notional repayment based on the card limit, even if you pay the balance off each month. Closing unused cards can lift your borrowing power.
