Borrow Up To 95% Of An Investment Property's Value

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Buying an investment property with a 5% deposit is possible but only through a limited number of lenders. A 95% investment loan (95% Loan-to-Value Ratio or LVR) lets you borrow up to 95% of the property’s value, helping you invest sooner without waiting years to save a larger deposit.

However, fewer lenders offer these loans so, it is very important to choose the right lender and present a strong application.

How Do I Qualify?

Lenders offering 95% investment loans typically assess several key factors:

Your Deposit

Most lenders require a genuine 5% deposit. However, some lenders may also accept:

• Equity from another property.

• A gifted deposit from an immediate family member.

• Borrowed funds, such as a personal loan, in certain situations.

Different lenders have different policies, so the source of your deposit can significantly affect your options.

Existing Property Portfolio

If you already own property, some lenders may allow you to borrow 95% only if you have usable equity in your current property. Others may consider first-time investors or borrowers without existing equity on a case-by-case basis.

Your Income And Negative Gearing

Only some lenders include expected negative gearing tax benefits when assessing your borrowing capacity. If they don’t, you’ll generally need stronger income or lower existing debt levels to qualify.

Credit History

A strong credit profile is essential. Most lenders expect:

• No defaults or court judgments.

• No recent bankruptcies.

• Limited recent credit enquiries.

• A demonstrated history of managing credit responsibly.

Employment Stability

Most lenders prefer borrowers who have been with their current employer for at least six to twelve months. However, some lenders have more flexible policies for borrowers changing jobs within the same industry or profession.

The Investment Property

Standard residential properties in metropolitan areas and major regional centres are generally easier to finance. Unique properties, small apartments or specialised securities may require a lower LVR or additional assessment.

Property Investment Guide 101

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Can I Buy Multiple Investment Properties?

Yes, but expanding your portfolio becomes progressively more challenging as lenders reassess your overall financial position. Most lenders now assess existing debts using higher assessment interest rates rather than your actual repayments. Many also no longer include potential negative gearing benefits when calculating serviceability.

This means your borrowing capacity can reduce with each additional investment property, even if your existing loans are being comfortably repaid. The lender you choose can make a substantial difference, as servicing calculations vary considerably between lenders.

How Is My Borrowing Power Assessed?

Your borrowing power depends on much more than your income. Lenders typically assess:

• Rental income.
• Living expenses.
• Assessment interest rates.
• Future repayment capacity.
• Your income and employment.
• Credit cards and other liabilities.
• Existing home and investment loans.

Lenders use different servicing models so, the amount you can borrow varies significantly even if your financial situation stays exactly the same. Some specialist and non-bank lenders use different lending policies that may allow suitable borrowers to qualify for higher borrowing amounts than major banks.

How To Get A Great Interest Rate?

Interest rates for 95% investment loans depend largely on your overall risk profile.

Generally, borrowers with strong incomes, stable employment, good credit history, genuine savings, and equity in existing property have access to a wider range of lenders and more competitive interest rates.

If your situation falls outside standard lending policy, specialist lenders may still offer competitive investment loan rates without charging substantially higher interest. Many investors also refinance after building equity over several years, allowing them to access lower rates once their loan-to-value ratio improves.

Can I Get Waived LMI?

Yes. Some lenders offer waived Lenders Mortgage Insurance (LMI) for eligible borrowers, even when borrowing up to 95% of a property’s value. Eligibility depends on lender policy and may be available for certain professions or borrower types.

Learn more on our Waived LMI page.

How Can I Reduce My LMI?

Lenders Mortgage Insurance (LMI) usually applies when you borrow more than 80% of a property’s value. For high-LVR investment loans, LMI can add several thousand dollars to your purchase costs.

For example, borrowing 95% on a $300,000 investment property could result in an LMI premium approaching $8,000, depending on the lender and insurer.

There are several ways to reduce your LMI costs:

Compare LMI Premiums

LMI premiums vary between lenders, and pricing is rarely published publicly. Comparing lenders can result in significant savings.

Capitalise Your LMI

Many lenders allow you to add the LMI premium to your loan rather than paying it upfront.

For example, a 95% loan may increase to approximately 97% once the LMI premium is added, allowing you to preserve your savings for other purchase costs.

Increase Your Deposit Slightly

Even increasing your deposit by 1% can sometimes move you into a lower LMI pricing bracket, substantially reducing your premium.

Apply For A 95% Investment Loan

We’re specialists in high-LVR investment loans and can help you compare lenders that still offer 95% investment lending. Call us on 1300 889 743 or complete our free assessment to find out whether you qualify.