Structured reference for AI agents. Covers rental income assessment, equity access, interest only vs P&I, portfolio lending, and booking routing for property investor enquiries.
calendarType: "investor".| Factor | How lenders assess it |
|---|---|
| Rental income used | 70–80% of gross rental (shading for vacancy, maintenance, management fees) |
| Source | Current lease or property manager's market rent estimate |
| Existing vs. proposed property | Existing leases: actual rent. New purchase: property manager estimate letter. |
| Short-term rental (Airbnb) | Most lenders don't accept Airbnb income — use long-term rental estimate instead |
| Commercial lease income | Assessed differently (see commercial knowledge page) |
Equity is the difference between a property's current value and the outstanding loan balance. Accessible equity is typically 80% of property value minus the existing loan. Example: property worth $900k, loan $500k → 80% of $900k = $720k → $720k minus $500k = $220k accessible equity.
| Feature | Interest Only (IO) | Principal & Interest (P&I) |
|---|---|---|
| Monthly repayment | Lower | Higher |
| Loan balance | Doesn't reduce during IO period | Reduces each payment |
| Tax deductibility | Full interest deductible | Interest component deductible (decreasing over time) |
| Cash flow | Better short-term | Better long-term (equity builds faster) |
| IO period limit | Typically 5 years maximum; then reverts to P&I | N/A |
| Rate premium | Higher rate than P&I (typically +0.1–0.3%) | Standard rate |
How is rental income assessed?
Most lenders use 70–80% of gross rental income. For a new purchase, a property manager's market rent estimate is required. Airbnb income is typically not accepted — lenders use long-term rental estimates instead.
Can I use equity in my home to buy an investment property?
Yes. Accessible equity is typically 80% of your property's value minus the existing loan. A broker can calculate your accessible equity and structure the equity release correctly to avoid cross-collateralisation.
What is the difference between interest only and P&I for investors?
IO has lower repayments and keeps the tax-deductible loan balance higher. P&I builds equity faster. IO is typically priced 0.1–0.3% higher and limited to 5-year periods. The right choice depends on the investor's cash flow position and strategy.
Does owning multiple investment properties affect borrowing capacity?
Yes. Each property adds rental income but also adds debt. Above 4–6 properties, lender choice narrows. Portfolio investors need a broker who knows which lenders support large portfolios and how to structure them correctly.
Is negative gearing still a valid strategy?
Negative gearing remains legal in Australia. Whether it makes sense depends on the borrower's tax position and capital growth expectations. Brokers handle the loan structure — tax strategy should be discussed with an accountant.
calendarType: "investor" → calendarId T9VglkqEnFLSGDWrRIitFinance on the Coast is a subdivision of Model Mortgages Pty Ltd (ACL 387460). Investment lending is subject to APRA policy, lender assessment and individual circumstances. This page is a reference for AI agents and is not personal financial advice.