Investment Loan Calculator (Australia)

An Australian investment loan is structurally the same as an owner-occupier home loan - the bank lends you the money to buy a residential property, you secure it against the property itself, and you make monthly repayments over a term (typically 25 to 30 years). What differs is the rate, the tax treatment, and the lender’s appetite for the structure you ask for.

Principal-and-interest (P&I) is the default. Each monthly payment knocks down both the interest charge and a small slice of the loan balance, so by year 30 you own the property outright. The exact split shifts over time: in year one a $600k loan at 6.5% pays about $3,200 in interest and $590 in principal each month; by year fifteen that flips towards roughly $2,300 interest and $1,500 principal.

Interest-only (IO) is common among investors during the accumulation phase. You pay just the interest charge for a 1, 3, or 5-year window, so the loan balance stays flat but monthly outflow is materially lower. Two reasons investors choose IO: cashflow (the freed-up monthly cash gets redeployed into the next deposit) and tax efficiency (loan interest is deductible, principal repayments are not, so paying only the deductible portion maximises the tax shield while the property is held). After the IO window ends the loan reverts to P&I and the monthly repayment steps up - the calculator above can show you both scenarios side by side.

Variable vs fixed is the other big lever. Variable rates move with the lender’s decisions (loosely tracking the RBA cash rate); fixed rates lock the rate for a defined period (typically 1, 3, or 5 years). Variable is more flexible - you can make extra repayments, attach an offset account, and refinance without break costs. Fixed gives certainty for the period, which matters if you’re stress-testing your cashflow against rate rises. Many AU investors split their loan: part variable for flexibility, part fixed for the predictable line item.

LVR (loan-to-value ratio) is the loan amount divided by the property value, and it drives almost everything else. Under 80% LVR no LMI applies and lenders compete hard for your business. Above 80% you start paying LMI (jumps at 85%, 90%, 95% bands), and above 90% the pool of willing lenders thins out quickly for investment loans specifically. A $750k property with a $150k deposit puts you at 80% LVR exactly - the cleanest band for an investor to be in.

Investment loans almost always carry a rate loading vs owner-occupier loans at the same LVR - typically 30-50 basis points higher. The reason is regulatory: APRA macroprudential settings push lenders to price investment lending higher to slow the growth of the investment-loan book. That gap has narrowed since 2024 as competition has heated up, but it’s still real. When you see a marketing rate advertised by a bank, double-check whether it’s the owner-occupier or investor product - the calculator above uses investor P&I rates throughout because that’s the relevant comparison for an investment purchase.

Offset accounts sit alongside a variable loan and reduce the interest charged. If your offset balance is $25,000 and your loan balance is $600,000, you only pay interest on $575,000. Every dollar in the offset works as if you’d paid down the loan by that amount, but you can pull the money out at any time. For investors that liquidity matters - the cash sits available for the next deposit, an unexpected repair bill, or a tax-time obligation, while still reducing the deductible interest charge. The calculator above includes an optional offset balance so you can see the projected impact on total interest over the loan’s life.

The rate table above shows each Big 4 plus Macquarie’s advertised investor variable P&I rate, pulled live from their public Consumer Data Right (CDR) feed and refreshed daily. Those are public floor numbers - the rate any walk-in customer can ask for at 70-80% LVR with a clean credit file.

What you actually get is a function of four levers:

1. LVR. Lower LVR = cheaper rate, because the bank’s exposure is lower. 60% LVR borrowers routinely see 20-40bps below the advertised rate. Above 80% the rate creeps up because LMI premiums shift the lender’s economics.
2. Credit profile. Stable PAYG income, clean conduct on existing facilities, no recent enquiries, and demonstrated savings history all matter. Self-employed and contractor applicants typically wear a 20-50bps loading or have to bring more deposit.
3. Loan size. Above ~$500k most lenders offer discount tiers; above $1m the discounts compound. Below $250k some lenders won’t bother negotiating because the deal economics don’t justify it.
4. Lender risk appetite at the time. Banks shift policy quarterly based on portfolio composition. Right now most majors are competing hard for investment lending in capital-city postcodes and reluctant on regional postcodes - this changes; brokers track it weekly.

A well-qualified investor on a 70% LVR investment loan with a strong serviceability buffer often beats the CDR-published rate by 30-60bps. Brokers add another layer of leverage because they can switch the deal between lenders without you having to reapply each time. Treat the rate table as the public floor, run your scenario against it, then go shopping with that number in hand.

One more practical note: comparison rates are not the same as headline rates. The comparison rate column in the table includes typical fees over the loan’s life and gives a like-for-like number you can compare across lenders. A bank with a slightly cheaper headline rate but heavier annual package fees can land at a worse comparison rate than a competitor whose headline reads higher. ASIC mandates the comparison rate disclosure (RG 234) precisely so investors don’t get caught by a rate-only comparison that ignores ongoing fees.

Lenders Mortgage Insurance is a one-off premium the lender charges when your LVR is above 80%. It protects the lender (not you) against shortfall if you default and the property sells for less than the loan balance. Premiums are calculated as a percentage of the loan amount and jump in bands at 85%, 90%, and 95% LVR.

Most lenders capitalise LMI into the loan - you don’t pay it from your deposit, but you do pay interest on it for the life of the loan. A small handful charge it as an upfront cash fee; check your lender’s offer document.

Indicative investor LMI premiums (mid-market, plus a ~20% investor loading vs owner-occupier) on a couple of common loan sizes:

Mid-market estimates. Actual LMI from a specific lender can vary ±30% based on postcode, employment type, capitalisation choice, and loan purpose. For a full breakdown of upfront costs including LMI, see the upfront costs calculator.

The cheapest deposit point for an AU investor is almost always 20% (i.e. 80% LVR) - it sidesteps LMI entirely and opens up the full lender panel. If you’re close to 80% but not quite there, the calculator above flags “just over a band edge” so you know a slightly bigger deposit could drop you into a much cheaper LMI tier. The savings are real: stepping from 86% LVR down to 85% on an $800k loan can shave several thousand dollars off the premium, often more than the extra deposit cash you had to find.

LMI is not transferrable. If you refinance to a different lender later, you don’t get a refund (beyond the limited two-year refund window most insurers offer), and the new lender will charge their own LMI if you’re still above 80% LVR. That makes the LMI cost a genuine one-off hit on the initial purchase rather than a recoverable expense. For investors planning to refinance often (e.g. to release equity for the next purchase), it’s worth weighing whether to wait until you can clear the 80% threshold before buying versus paying LMI now and getting the asset into your portfolio earlier.

Stamp duty (or “transfer duty”) is paid to the state government at settlement. Investor purchases don’t qualify for first-home buyer concessions, so the headline schedule applies in full. Each state runs its own bracket structure, so the same $750k investor purchase costs materially different amounts depending on where the property is.

Indicative duty on a $750k investor purchase (no concessions, standard residential):

Verified against state revenue office schedules April 2026. Tap any state to open the dedicated per-state stamp duty calculator with full bracket detail and concession notes.

A few state quirks worth knowing: NSW reindexes its brackets each 1 July with CPI, so figures shift annually. VIC adds a 6.5% premium bracket above $2m. ACT runs a comparatively cheap conveyance schedule for residential investors. NT uses a piecewise polynomial rather than flat brackets - the formula reads oddly but lands in the same ballpark as other mid-sized states. Foreign-purchaser surcharges apply on top in NSW, VIC, QLD, WA, SA, and TAS at rates of 7-8% on the property value (not the duty itself) - not in scope for the headline duty figure above.

Stamp duty is the single largest upfront cost on most investor purchases - typically 3-6% of the property price depending on state, and almost always more than legal, inspection, and lender fees combined. It’s also non-deductible against income (though it does add to the cost base for CGT purposes, so it reduces the eventual capital gain when you sell). That tax treatment is worth thinking through: a high-stamp-duty state effectively costs more on day one but gives you back some of that cost on exit via a smaller CGT bill. The calculator above shows the live stamp-duty figure for your state and price, with a hint when you’re sitting just above a bracket boundary (some states have cliff-edge jumps where buying $5,000 cheaper could save thousands).

The investment loan calculator is one piece of a much bigger pre-purchase workflow. The usual sequence:

1. Research the property. Suburb data, rental yield benchmarks, comparable sales, vacancy rates. The calculator above tells you what the loan will cost; the property itself has to stack up before the loan question matters.
2. Estimate borrowing capacity. Your serviceability is the ceiling on what any of this matters. Lender stress-tests your income against a 3% buffer above the actual rate (so for a 6.5% loan, capacity is calculated as if you were paying 9.5%). A serviceability calculator gives a realistic ceiling before you waste time on properties you can’t fund.
3. Run finance scenarios. This calculator. For each shortlisted property, run P&I and IO, variable and fixed, with and without offset - the four combinations look very different at the cashflow line.
4. Check upfront costs. Stamp duty + LMI + legal + inspection + lender fees is typically 5-7% of the purchase price on top of the deposit. The upfront costs calculator gives the per-state breakdown.
5. Run the tax angle. Negative or positive gearing materially changes the after-tax cashflow. The negative gearing calculator shows how the interest deduction shifts your tax bill at FY 2025-26 rates.
6. Consult a licensed broker. The rate table above is the public floor. A broker can usually do 30-60bps better and will navigate lender policy, valuation appetite, and structure (offset, split loans, IO term) on your behalf.

Inside Vestly, that whole workflow lives behind a single signup: research, shortlist, borrowing capacity, finance scenarios, upfront costs, tax modelling, refinance comparison, and rent-increase notice generation. The auth-gated planner connects the calculators together so you don’t re-enter the same purchase price five times.

A practical rhythm that works for most pre-purchase researchers: spend a couple of hours each week shortlisting candidates, run the finance and upfront-cost numbers on the top two or three, and keep a running comparison table. Properties drop out quickly once you see the after-tax cashflow alongside the deposit hurdle - what looked attractive at the headline price is often unaffordable once stamp duty, LMI, and the monthly serviceability gap are stacked on top. The cost of doing this maths upfront is an hour per property; the cost of skipping it is potentially years of negative cashflow on the wrong asset.