Compare variable rate interest-only investment home loans

  • Compare variable rate interest-only investor home loans from a range of providers based on rates, fees and features.
How to switch home loans
How to switch home loans

Variable interest-only investment home loan rates compared

The table below shows a selection of variable interest-only investment home loan rates for a $600,000 loan with monthly repayments. The table is sorted by lowest interest rate.

LenderProductInterest RateComparison RateRepaymentsFeaturesExit FeesUpfront FeesOngoing Fees

ING

Book a call

Mortgage Simplifier

6.54%

6.42%

Ongoing Repayments: $4,399.57

1 Year Interest Payable: $39,240.00

2 Year Interest Payable: $78,480.00

3 Year Interest Payable: $117,720.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: No

Partial Offset: No

Redraw: Yes

Repayment Holiday: No

Splitting: Yes

Maximum LVR - with LMI: 90%

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $499.00

Legal/Solicitor Fee : $0.00

Settlement Fee: $299.00

Valuation Fee: $225.00

Additional Valuation Fee: $0.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $0.00

AMP

Book a call

Professional Package Variable Rate Loan

6.61%

6.81%

Ongoing Repayments: $4,010.10

1 Year Interest Payable: $39,660.00

2 Year Interest Payable: $79,320.00

3 Year Interest Payable: $118,980.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: Yes

Partial Offset: No

Redraw: Yes

Repayment Holiday: No

Splitting: Yes

Maximum LVR - with LMI: N/A

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $0.00

Legal/Solicitor Fee : $295.00

Settlement Fee: $0.00

Valuation Fee: $0.00

Additional Valuation Fee: $0.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $349.00

Qudos Bank

Book a call

No Frills Home Loan

6.64%

6.52%

Ongoing Repayments: $4,028.78

1 Year Interest Payable: $39,840.00

2 Year Interest Payable: $79,680.00

3 Year Interest Payable: $119,520.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: No

Partial Offset: No

Redraw: Yes

Repayment Holiday: No

Splitting: Yes

Maximum LVR - with LMI: 90%

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $0.00

Legal/Solicitor Fee : $0.00

Settlement Fee: $0.00

Valuation Fee: $0.00

Additional Valuation Fee: $0.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $0.00

Bankwest

Book a call

Complete Variable Home Loan

6.69%

7.04%

Ongoing Repayments: $4,469.91

1 Year Interest Payable: $40,140.00

2 Year Interest Payable: $80,280.00

3 Year Interest Payable: $120,420.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: Yes

Partial Offset: No

Redraw: Yes

Repayment Holiday: No

Splitting: Yes

Maximum LVR - with LMI: 90%

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $0.00

Legal/Solicitor Fee : $250.00

Settlement Fee: $0.00

Valuation Fee: $0.00

Additional Valuation Fee: $0.00

Settlement Administration Fee: $0.00

Title Search Fee: $40.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $395.00

Suncorp

Book a call

Back to Basics Home Loan

6.69%

6.55%

Ongoing Repayments: $4,028.78

1 Year Interest Payable: $40,140.00

2 Year Interest Payable: $80,280.00

3 Year Interest Payable: $120,420.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: No

Partial Offset: No

Redraw: Yes

Repayment Holiday: No

Splitting: Yes

Maximum LVR - with LMI: 90%

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $0.00

Legal/Solicitor Fee : $0.00

Settlement Fee: $0.00

Valuation Fee: $0.00

Additional Valuation Fee: $150.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $0.00

Resimac

Book a call

Prime Flex

6.69%

7.02%

Ongoing Repayments: $4,648.19

1 Year Interest Payable: $41,940.00

2 Year Interest Payable: $83,880.00

3 Year Interest Payable: $125,820.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: Yes

Partial Offset: No

Redraw: Yes

Repayment Holiday: No

Splitting: Yes

Maximum LVR - with LMI: 95%

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $0.00

Legal/Solicitor Fee : $0.00

Settlement Fee: $0.00

Valuation Fee: $330.00

Additional Valuation Fee: $0.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $299.00

UBank

Book a call

Neat Variable

6.74%

6.57%

Ongoing Repayments: $4,010.10

1 Year Interest Payable: $40,440.00

2 Year Interest Payable: $80,880.00

3 Year Interest Payable: $121,320.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: No

Partial Offset: No

Redraw: Yes

Repayment Holiday: Yes

Splitting: No

Maximum LVR - with LMI: N/A

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $250.00

Legal/Solicitor Fee : $0.00

Settlement Fee: $0.00

Valuation Fee: $0.00

Additional Valuation Fee: $0.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $0.00

Adelaide Bank

Book a call

Variable Home Loan

6.74%

6.60%

Ongoing Repayments: $4,025.04

1 Year Interest Payable: $40,440.00

2 Year Interest Payable: $80,880.00

3 Year Interest Payable: $121,320.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: No

Partial Offset: No

Redraw: Yes

Repayment Holiday: No

Splitting: Yes

Maximum LVR - with LMI: N/A

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $299.00

Legal/Solicitor Fee : $0.00

Settlement Fee: $199.00

Valuation Fee: $0.00

Additional Valuation Fee: $0.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $0.00

Macquarie Bank

Book a call

Macquarie Bank Offset Home Loan Package

6.75%

6.98%

Ongoing Repayments: $4,032.52

1 Year Interest Payable: $40,500.00

2 Year Interest Payable: $81,000.00

3 Year Interest Payable: $121,500.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: Yes

Partial Offset: No

Redraw: Yes

Repayment Holiday: No

Splitting: Yes

Maximum LVR - with LMI: N/A

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $350.00

Legal/Solicitor Fee : $363.00

Settlement Fee: $0.00

Valuation Fee: $0.00

Additional Valuation Fee: $110.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $0.00

Commonwealth Bank

Book a call

Standard Variable Rate

6.96%

7.16%

Ongoing Repayments: $4,126.54

1 Year Interest Payable: $41,760.00

2 Year Interest Payable: $83,520.00

3 Year Interest Payable: $125,280.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: Yes

Partial Offset: No

Redraw: Yes

Repayment Holiday: Yes

Splitting: Yes

Maximum LVR - with LMI: 90%

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $0.00

Legal/Solicitor Fee : $0.00

Settlement Fee: $200.00

Valuation Fee: $0.00

Additional Valuation Fee: $0.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $395.00

Bank Of Melbourne

Book a call

Basic Home Loan

6.99%

6.99%

Ongoing Repayments: $5,272.93

1 Year Interest Payable: $41,940.00

2 Year Interest Payable: $83,880.00

3 Year Interest Payable: $125,820.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: No

Partial Offset: No

Redraw: Yes

Repayment Holiday: Yes

Splitting: Yes

Maximum LVR - with LMI: N/A

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $0.00

Legal/Solicitor Fee : $0.00

Settlement Fee: $100.00

Valuation Fee: $0.00

Additional Valuation Fee: $164.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $0.00

St George Bank

Book a call

St George Bank Basic Home Loan

6.99%

6.99%

Ongoing Repayments: $5,272.93

1 Year Interest Payable: $41,940.00

2 Year Interest Payable: $83,880.00

3 Year Interest Payable: $125,820.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: No

Partial Offset: No

Redraw: Yes

Repayment Holiday: Yes

Splitting: Yes

Maximum LVR - with LMI: N/A

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $0.00

Legal/Solicitor Fee : $0.00

Settlement Fee: $100.00

Valuation Fee: $0.00

Additional Valuation Fee: $164.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $0.00

Bank SA

Book a call

Basic Home Loan

6.99%

6.99%

Ongoing Repayments: $5,272.93

1 Year Interest Payable: $41,940.00

2 Year Interest Payable: $83,880.00

3 Year Interest Payable: $125,820.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: No

Partial Offset: No

Redraw: Yes

Repayment Holiday: Yes

Splitting: Yes

Maximum LVR - with LMI: N/A

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $0.00

Legal/Solicitor Fee : $0.00

Settlement Fee: $100.00

Valuation Fee: $0.00

Additional Valuation Fee: $164.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $0.00

ANZ Bank

Book a call

Simplicity PLUS

7.19%

7.02%

Ongoing Repayments: $4,594.34

1 Year Interest Payable: $43,140.00

2 Year Interest Payable: $86,280.00

3 Year Interest Payable: $129,420.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: No

Partial Offset: No

Redraw: Yes

Repayment Holiday: No

Splitting: Yes

Maximum LVR - with LMI: 90%

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $0.00

Legal/Solicitor Fee : $0.00

Settlement Fee: $160.00

Valuation Fee: $150.00

Additional Valuation Fee: $0.00

Settlement Administration Fee: $0.00

Title Search Fee: $50.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $0.00

Yellow Brick Road

Book a call

Essentials Prime Full Doc

7.34%

7.23%

Ongoing Repayments: 0

1 Year Interest Payable: $0.00

2 Year Interest Payable: $0.00

3 Year Interest Payable: $0.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: No

Partial Offset: No

Redraw: Yes

Repayment Holiday: No

Splitting: Yes

Maximum LVR - with LMI: 95%

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $0.00

Legal/Solicitor Fee : $402.00

Settlement Fee: $0.00

Valuation Fee: $330.00

Additional Valuation Fee: $0.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $0.00

Resi

Book a call

Essentials Prime Full Doc

7.34%

7.23%

Ongoing Repayments: 0

1 Year Interest Payable: $0.00

2 Year Interest Payable: $0.00

3 Year Interest Payable: $0.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: Yes

Partial Offset: No

Redraw: Yes

Repayment Holiday: No

Splitting: Yes

Maximum LVR - with LMI: 95%

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $0.00

Legal/Solicitor Fee : $402.00

Settlement Fee: $0.00

Valuation Fee: $330.00

Additional Valuation Fee: $0.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $0.00

Firstmac

Book a call

Basic Variable

7.44%

7.47%

Ongoing Repayments: 0

1 Year Interest Payable: $0.00

2 Year Interest Payable: $0.00

3 Year Interest Payable: $0.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: No

Partial Offset: No

Redraw: Yes

Repayment Holiday: No

Splitting: Yes

Maximum LVR - with LMI: 90%

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $0.00

Legal/Solicitor Fee : $200.00

Settlement Fee: $300.00

Valuation Fee: $220.00

Additional Valuation Fee: $0.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $0.00

Axis

Book a call

Origin Standard Variable

7.49%

7.61%

Ongoing Repayments: $4,275.19

1 Year Interest Payable: $44,940.00

2 Year Interest Payable: $89,880.00

3 Year Interest Payable: $134,820.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: Yes

Partial Offset: No

Redraw: Yes

Repayment Holiday: No

Splitting: No

Maximum LVR - with LMI: N/A

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $194.00

Legal/Solicitor Fee : $0.00

Settlement Fee: $0.00

Valuation Fee: $305.00

Additional Valuation Fee: $0.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $0.00

Annual Service Fee: $395.00

Annual Package Fee: $0.00

Bluestone

Book a call

Prime - Full Doc

7.74%

7.62%

Ongoing Repayments: $4,410.56

1 Year Interest Payable: $46,440.00

2 Year Interest Payable: $92,880.00

3 Year Interest Payable: $139,320.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: No

Partial Offset: No

Redraw: Yes

Repayment Holiday: No

Splitting: Yes

Maximum LVR - with LMI: N/A

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $590.00

Legal/Solicitor Fee : $400.00

Settlement Fee: $120.00

Valuation Fee: $0.00

Additional Valuation Fee: $0.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $0.00

Pepper Money

Book a call

Essential (Full Doc)

7.74%

7.76%

Ongoing Repayments: $4,410.56

1 Year Interest Payable: $46,440.00

2 Year Interest Payable: $92,880.00

3 Year Interest Payable: $139,320.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: Yes

Partial Offset: No

Redraw: Yes

Repayment Holiday: No

Splitting: Yes

Maximum LVR - with LMI: 95%

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $599.00

Legal/Solicitor Fee : $330.00

Settlement Fee: $0.00

Valuation Fee: $0.00

Additional Valuation Fee: $0.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $10.00

Annual Service Fee: $0.00

Annual Package Fee: $0.00

MA Money

Book a call

Prime Full Doc

7.74%

7.64%

Ongoing Repayments: $4,410.56

1 Year Interest Payable: $46,440.00

2 Year Interest Payable: $92,880.00

3 Year Interest Payable: $139,320.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: Yes

Partial Offset: No

Redraw: Yes

Repayment Holiday: No

Splitting: Yes

Maximum LVR - with LMI: 90%

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $500.00

Legal/Solicitor Fee : $400.00

Settlement Fee: $0.00

Valuation Fee: $0.00

Additional Valuation Fee: $0.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $0.00

Pepper

Book a call

Prime Solutions (Full Doc)

7.74%

7.76%

Ongoing Repayments: $4,410.56

1 Year Interest Payable: $0.00

2 Year Interest Payable: $0.00

3 Year Interest Payable: $0.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: Yes

Partial Offset: No

Redraw: Yes

Repayment Holiday: No

Splitting: Yes

Maximum LVR - with LMI: 95%

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $599.00

Legal/Solicitor Fee : $330.00

Settlement Fee: $0.00

Valuation Fee: $0.00

Additional Valuation Fee: $0.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $10.00

Annual Service Fee: $0.00

Annual Package Fee: $0.00

La Trobe

Book a call

Full Doc Residential - A

7.89%

8.13%

Ongoing Repayments: $4,463.27

1 Year Interest Payable: $47,695.00

2 Year Interest Payable: $95,390.00

3 Year Interest Payable: $143,085.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: No

Partial Offset: No

Redraw: Yes

Repayment Holiday: No

Splitting: Yes

Maximum LVR - with LMI: 95%

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $0.00

Legal/Solicitor Fee : $0.00

Settlement Fee: $0.00

Valuation Fee: $305.00

Additional Valuation Fee: $0.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $15.00

Annual Service Fee: $0.00

Annual Package Fee: $0.00

NAB

Book a call

Base Variable Rate Home Loan

8.27%

7.82%

Ongoing Repayments: $4,379.45

1 Year Interest Payable: $49,620.00

2 Year Interest Payable: $99,240.00

3 Year Interest Payable: $148,860.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: Yes

Partial Offset: No

Redraw: Yes

Repayment Holiday: Yes

Splitting: Yes

Maximum LVR - with LMI: 95%

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $600.00

Legal/Solicitor Fee : $0.00

Settlement Fee: $0.00

Valuation Fee: $0.00

Additional Valuation Fee: $0.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $0.00

Westpac

Book a call

Rocket Investment Loan

8.35%

8.67%

Ongoing Repayments: $5,052.30

1 Year Interest Payable: $50,100.00

2 Year Interest Payable: $100,200.00

3 Year Interest Payable: $150,300.00

Total Interest Payable: $0.00

Total Amount to be Repaid: $0.00

Extra Repayment: Yes

Offset: Yes

Partial Offset: No

Redraw: Yes

Repayment Holiday: Yes

Splitting: Yes

Maximum LVR - with LMI: N/A

Discharge Fee: $0.00

Early Repayment Fee: $0.00

Establishment Fee: $0.00

Legal/Solicitor Fee : $0.00

Settlement Fee: $0.00

Valuation Fee: $0.00

Additional Valuation Fee: $0.00

Settlement Administration Fee: $0.00

Title Search Fee: $0.00

Account Service fee: $0.00

Annual Service Fee: $0.00

Annual Package Fee: $395.00

Rates are regularly updated and are based on a loan amount of $600,000 and a property value of $850,000 (giving an LVR of less than 80%), owner-occupied, for purchase of a residential home as a primary residence, with excellent credit. Total interest costs and total amount to be repaid estimates are based on a 30-year loan term. ^Warning: Comparison rates are calculated based on a loan amount of $150,000 repaid over a 25-year term with monthly repayments. Different loan amounts and terms will result in different comparison rates. Check with the provider for full loan details, including rates, fees, eligibility and terms and conditions to make sure the product is right for you. While this is an extensive list of the lowest-rate home loans in Australia, we can't guarantee that all loans available in the market are shown.

Variable rate interest-only investment home loans explained

Some investors may opt to make interest-only repayments on their variable rate investment property loan. To understand why this type of loan set-up may be worth considering, let's look at the benefits and how it works.

How does a variable rate investment home loan work?

The interest rate on a variable rate investment home loan can fluctuate over time. Generally, variable mortgage rates change in line with the cash rate set by the Reserve Bank of Australia (RBA). But banks can change rates for other reasons too. A variable rate means your mortgage repayments will be lower when interest rates drop but higher when interest rates rise.

Investors may prefer an investment home loan with a variable interest rate for the greater flexibility it typically offers compared to a fixed rate. This can include the ability to make unlimited extra repayments (especially when rates drop) and to access more home loan features that can save investors interest over time.

What is an interest-only investment loan?

Interest-only is a repayment option on your investment home loan where you only pay the interest component for a set period (up to five years) without reducing the principal amount.

Interest-only loans are a popular option for investors as repayments are lower, and you can claim higher interest repayment tax deductions. This can free up cashflow to re-invest into the property or elsewhere or to pay other debts.

Throughout the interest-only period, you're not reducing the principal balance, which means you'll need a plan to repay the loan amount at some point.

At the end of the interest-only period, investors may choose to:

  • Switch to principal and interest (P&I) repayments to pay both the loan principal and interest, resulting in higher repayments
  • Refinance to extend the interest-only period, further delaying principal repayments
  • Sell the property at the end of the interest-only period and use the sale funds to pay out the loan
Mansour Soltani

“It’s important to have a plan to repay your principal or have a clear exit strategy, depending on the product you choose. For example, if you’re expecting some capital growth within five years, you could opt for a five-year interest-only home loan and then sell the property afterwards to make a return. Each investor will have a different goal, so it’s best to speak to a financial adviser or mortgage broker about your options."

Mansour Soltani, Money.com.au's home loan expert

What is a good variable interest rate on an interest-only investment home loan?

The best variable investment loan rates will depend on your deposit (or equity), loan amount and credit profile.

To give you an idea of what’s available right now:

  • The lowest variable rate for interest-only investment home loans on Money’s database is: 6.54% (comparison rate^ 6.42%)
  • The average variable rate on interest-only investment home loans on Money’s database: 7.21%
Australia's Money Matchmaker matching you with your best loans across multiple lenders
Investment home loans generally have higher interest rates because investors are considered riskier borrowers than owner-occupiers.

Investment home loan features

Variable rate investment home loans usually have added features and benefits that can be useful to investors, including:

  • Extra repayments: Make additional (sometimes unlimited) repayments on top of your minimum mortgage repayments. Investors may make extra repayments when rates drop without impacting their budget. Making additional repayments reduces your loan balance, interest costs and loan term.
  • Redraw facility: Allows you to withdraw any extra repayments you've made on your home loan. Investors can use their redraw facility for any purpose, including to fund renovations of the property, to finance other projects or to pay other debts.
  • Offset account: An offset account is a transaction account linked to your investor home loan account to reduce your interest owed. The balance in your offset account is subtracted from your mortgage balance and interest. Investors can still access the money in their offset at any time.
  • Flexible repayments: You can choose your repayment frequency (e.g. weekly, fortnightly, or monthly) or opt for an interest-only repayment option for a period of time.
  • Portability: You can transfer your existing loan to a new property if you sell and buy another investment property.

Should you choose a variable or fixed rate for your investment home loan?

It will depend on the market and the rates you can access. Variable rates can be ideal for investors who keep up with the market and want access to additional loan features.

For example, investors can deposit funds into their offset account to reduce their interest payable or use the funds in their redraw facility to add to regular repayments when rates go up.

How to compare investment property home loans

1

Look at the advertised rate

Compare the advertised rate of different investor home loans to estimate your interest-only monthly repayments. Keep in mind that the lowest interest rate isn’t necessarily going to be the cheapest option. Home loan features, fees, and your loan term will be part of the equation. Look at the entire loan package to see which will save you the most money on your loan over time.

2

Check the comparison rate

It’s important to look at the comparison rate, which gives you a more comprehensive view of the overall cost of a loan, including interest and fees. It’s a more accurate cost comparison to use across lenders and products. Your individual rate may differ depending on your loan-to-value ratio (LVR) and loan amount.

3

Consider home loan fees

While some home loan fees may be tax deductible, don’t rest on your laurels. You still want to find an investment loan with lower fees or a simple fee structure to help with budgeting and record keeping.

4

Choose the right home loan features

Variable rate investment loans come with a host of features that can help investors reduce their interest bill and pay their debt off faster. An offset account (or multiple offset accounts) and a redraw facility are two features to look for. You could also switch your home loan repayments from monthly to fortnightly to shave years off your mortgage.

FAQs about investment home loans

An investment home loan allows you to purchase an investment property, whether that’s a home you rent out to tenants or another type of real estate investment. Because of the risk involved, interest rates for investment home loans are usually higher than those for owner-occupier home loans (for buyers who buy a home to live in). Besides that, they both work the same way with similar features and fees.

You typically need a deposit of 20% of the property's value (or usable equity) to avoid paying lender's mortgage insurance (LMI) on an investment home loan. Some lenders will accept a deposit as low as 5%, although it may not get you the best rate.

Usable equity is the equity in your property you can access and borrow against, which is lower than your total home equity. Investors may refinance their home loan to access equity for renovations, debt consolidation or other investments. Lenders calculate usable equity as 80% of property’s value, minus the loan balance.

Shopping around for the right loan can save you thousands of dollars in interest and fees.

Home Loans guides and resources

What's the next step on your property journey? Our home loan guides will help you navigate the road ahead, whether you're buying, building or looking to save on an existing loan.

Written by

Megan Birot Money.com.au writer

Senior Finance Writer

Megan Birot

Reviewed by

Mansour Soltani home loan expert

Home Loans Expert

Mansour Soltani

AS FEATURED IN