How borrowing power works for investors
Lenders shade rental income, add a serviceability buffer, and treat existing investor debt at a higher floor rate. The stack changes how much you can borrow.
Why
Lenders only count 70–80% of your rental income (some go to 90%) to allow for vacancy and costs. Existing debt is tested at a floor rate (3% above the actual rate). Negative gearing tax benefits are treated differently lender-to-lender. And some postcodes have restrictions for high-density apartments.
WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Comparison rates are calculated on a secured loan of $150,000 over 25 years for home loans and a loan of $30,000 over 5 years for car and personal loans, unless the lender states another basis. Business loans and equipment finance for a business purpose have no mandatory comparison rate.