Investment Property Loans for Nepali Australians: What You Need to Know

Investment property lending is about more than rental income

One of the most common assumptions among first-time investors is that the expected rent will simply pay the mortgage. Moneysmart warns against relying on rent to cover the loan because properties can be vacant and ongoing costs continue even when there is no tenant.

Lenders also do not necessarily use 100% of the advertised weekly rent in their servicing calculation. Each lender applies its own rental-income policy and buffers for expenses, vacancies and other risks.

How much deposit do you need for an investment property?

There is no universal deposit percentage for every investor. Your required contribution depends on the lender’s maximum LVR, the property type, your financial position and whether lenders mortgage insurance is available for the proposed loan.

A larger deposit can reduce the amount borrowed and improve the LVR, but many existing homeowners use equity rather than saving the entire investment deposit in cash.

Can you use equity in your home to buy an investment property?

Potentially. If your home has increased in value or you have reduced the mortgage balance, part of that equity may be available to support an investment purchase. However, total equity and usable equity are not the same thing.

The lender will usually limit borrowing to an acceptable LVR and will also need to confirm that your income can service the additional debt. Increasing debt secured against your home also increases financial risk.

Principal and interest vs interest-only investment loans

Moneysmart specifically warns that an interest-only loan does not reduce the principal during the interest-only period and repayments can rise materially once principal repayments begin. Whether interest-only is appropriate depends on your investment strategy, cash flow and total borrowing cost.

What costs should property investors budget for?

The mortgage is only one cost of investment property ownership. Moneysmart lists costs such as council and water rates, building and landlord insurance, body corporate fees, land tax, property management, repairs and maintenance.

• Purchase-related duty and conveyancing costs.
• Building and pest inspections where relevant.
• Loan and valuation costs.
• Council and water rates.
• Land tax where applicable.
• Strata or body corporate charges.
• Landlord and building insurance.
• Property management fees.
• Repairs and maintenance.
• Vacancy periods with no rental income.

Investment property tax basics

Rental property taxation can be complex, so tax advice should come from a registered tax professional. At a high level, rental income is generally assessable income, and some expenses incurred in earning that rental income may be deductible under current tax rules.

ATO guidance states that interest on money borrowed to purchase a rental property can generally be deductible to the extent the borrowing is used to produce rental income and the property is rented or genuinely available for rent. If borrowed funds are used partly for private purposes, the interest expense generally needs to be apportioned.

The ATO also distinguishes between expenses that may be immediately deductible and borrowing expenses or capital-related amounts that may be claimed over time. Do not structure an investment loan solely around an assumed tax deduction without obtaining tax advice.

Positive gearing, negative cash flow and investment risk

Investment property should not be assessed only on whether the property is described as “positively geared” or “negatively geared.” Borrowing to invest magnifies both gains and losses. Moneysmart describes borrowing to invest as a high-risk strategy and notes that you still need to repay the loan and interest even if the investment falls in value.

Consider whether you could continue repayments if rent falls, the property is vacant, major repairs arise or interest rates increase.

Investment property loan support across Australia’s eight capital cities

SKR Global Finance is physically based in Mill Park, Melbourne and supports eligible Nepali property investors across Australia using phone, video, email and digital mortgage processes.

How lenders assess rental income

Rental income can help service an investment loan, but lenders typically apply their own assessment methodology rather than simply using the full advertised rent. They may consider an existing lease, rental statement or independent rental appraisal and then apply an internal percentage or buffer.

This is one reason two lenders can produce different borrowing-capacity outcomes for the same investor.

Can you refinance an investment property later?

Yes, subject to eligibility. Investors may refinance to review pricing, restructure debt, access usable equity or prepare for another purchase. But switching costs, tax implications and loan-purpose tracing should be considered carefully.

Read our refinancing guide for Nepali homeowners and explore SKR Global Finance refinancing services if you already own property.

A practical investment-loan checklist

1. Know your current borrowing position. Review your home loan, debts, income and household expenses.
2. Calculate your deposit or usable equity. Include buying costs and retain a cash buffer.
3. Stress-test the cash flow. Consider vacancy, maintenance and higher interest rates.
4. Compare lender rental-income policies. Rental servicing can vary between lenders.
5. Choose the loan structure deliberately. Compare principal-and-interest with interest-only rather than choosing based only on the first repayment.
6. Keep private and investment borrowing clear. This can matter for both loan management and tax treatment.
7. Get tax advice. A mortgage broker can help with lending, but tax deductions and investment tax strategy should be discussed with a tax adviser.

Why use a Nepali-speaking mortgage broker for an investment loan?

Investment lending can involve more moving parts than a standard owner-occupied home loan. You may be using existing equity, expected rent and multiple properties while deciding between repayment structures.

SKR Global Finance can compare available investment-lending options across more than 30 lenders and finance partners, subject to accreditation, while explaining the lending process in Nepali, Hindi or English.

Sandeep Sigdel

Founder, Director and Principal Mortgage Broker at SKR Global Finance. Sandeep brings more than seven years of combined experience across mortgage lending, bank credit departments and mortgage broking in Australia and overseas.

CRN 5764367+ Years Combined ExperienceNepaliHindiEnglish30+ Lenders & Finance Partners

Frequently asked questions

Related property and mortgage guides

Final answer

An investment property loan should be assessed as part of a wider investment plan, not simply as a question of whether a lender will approve the maximum possible amount. Deposit, usable equity, rent, vacancies, ownership costs, interest-rate risk and the long-term loan structure all matter.

A mortgage broker can help with the lending comparison and structure. For investment strategy and tax consequences, work with appropriately qualified financial and tax advisers as well.