Investing in property

Featured basic variable rate

For an investment property, with LVR up to 70%

6.74% p.a.

2-yr intro discount on variable rate^

7.06% p.a.

Comparison rate*

Variable rate includes 2-year 1.89% p.a. discount from loan settlement, reverting to 1.49% p.a. life-of-loan discount thereafter^ (excludes refinances within Westpac Group). Plus 0.10% p.a. discount for LVR⁺ up to 70%. New basic Investment home loans on P&I repayments. T&Cs apply.

Why choose Westpac for your investment?

Discounts for diligent investors

Get additional interest rate discounts by paying 12 months interest in advance on Fixed Rate Investment Property Loans with Interest Only in Advance.^***

Best Investor Lender two years running

Awarded at RFi Group Australian Lending Awards, 2020 & 2021 for Best Investor Lender

Know the property inside out

Search an address or suburb for the sale history, price guide, expected capital gain and rental income – with our full online Property Report.

Guides and calculators for property investors

Investors’ tip #2

For a more realistic rental return, choose your property based on the data. Factor in vacancy, repair and insurance costs, as well as strata, legal, maintenance and agent fees.

How to estimate net rental yield

Property and suburb reports

Applying is simple, get started online

1. Apply for your home loan now

Apply in around 10-20 mins, or save and come back later. Tell us about you and see how much you could borrow. And don't worry, we'll let you know before the credit check. Need help? You can live chat with us to help you complete the application.

2. Fast approval

You could get unconditional refinance approval the same day you apply. Or conditional approval within 1 business day to help you confidently bid or make an offer for up to 90 days.

3. Discuss your rate and features with a lender

A dedicated lender will be in touch to go over the finer points of your loan. You’ll have an opportunity to negotiate your rate, as there’s no obligation until you accept your rate and loan offer.

4. On to settlement

Your lender will finalise your loan through to settlement. Accept our loan offer, and that’s it.

Apply online Apply online Book appointment Book appointment

Already started an application? Retrieve your application

What to consider when buying an investment property

Pros and cons of property investment

Whether you're a savvy property investor or new to real estate investment, here are some things to look out for.

Advantages

Capital growth. Property prices have shown good growth over the long-term, with less volatility than other investments like the stock market.
Physical asset. You can renovate and add your personal touches to increase its value.
Tax deduction. Most of your property's expenses can be offset against your rental income.
Passive income. The right property filled with quality tenants can generate a lucrative long-term income.
Diversification. A property portfolio adds balance to your investment portfolio, protecting you against underperformance in any one asset class. There's also an option to buy property through an SMSF (self-managed super fund), although this does come with restrictions.

Considerations

Costs involved. Investment properties can be costlier than other investments, with high costs like stamp duty, real estate agents, professional property manager and maintenance costs, landlord insurance and exit costs. For example, you may need to pay Capital Gains Tax when you sell – even if it’s your holiday home – which will eat into your capital growth.
Non-liquid asset. If you need to access money, you can't sell off a room. It takes a long time to sell and settle a property, unlike reselling other investments, like shares and managed funds – read more on using equity to invest in shares.
Risk. You could overestimate market value, property prices could fall, and you could get into negative equity – where property value is less than your loan amount.
Interest rates. Investment home loans have higher rates than owner-occupied home loans. And interest rates could rise over the life the of your loan, increasing your repayments.
Tenants. You're reliant on your property having good tenants – periods of vacancy or bad tenants can eat into your property income, and reduce your rental yield.

Costs of investing in property

Here’s a summary of some of the costs involved. It's a good idea to talk with your accountant, or seek professional advice, about which of the following expenses are tax deductible against your income.

Upfront costs can include:

Government transfer/stamp duty, based on your home’s value (first home buyers could be eligible for grants and concessions)
Government mortgage registration fee, land tax and registration of title
Lenders Mortgage Insurance
Buyer’s agent fees
Pest, building or strata reports
Westpac property valuer fee (if a valuation² is needed)
Conveyancer or legal fees
Advertising costs through a good property manager
Real estate agent costs.

Estimate some of these upfront costs

Ongoing property expenses can include:

Mortgage repayments – estimate yours
Additional interest, if interest rates rise
Property management fees
Home maintenance costs
Strata levies, for most units
Council rates
Utilities, like electricity
Insurance
State Government land taxes (as it’s not your primary residence)
Covering any gap between rent and home loan repayments (vacancies and rent discounting).

Other costs:

Investment home loan fees and costs
Capital gains tax, if you sell

One of our lenders will answer all your questions about investment property costs or, if you have one, ask your mortgage broker.

What is rentvesting?

It’s the increasingly popular investment strategy of first home buyers, which involves buying an investment where you can afford, and renting where you want to live.

Advantages

Rentvesting can help you get into the property market sooner, without having to compromise where you live. Want to live near the beach, close to family and work, in the mountains – why not?

What’s more, you'll earn rental income that fully or partially offsets the rent you’re paying. There's also the added bonus of possible income tax deductions on your expenses, like home maintenance, depreciation and negative gearing.

Considerations

You’ll be new to property and new to property investing, so there’s a lot to think about. To get the first home buyer’s grant, you’ll need to live there for six of the first 12 months. Bear in mind, home loan interest rates tend to be higher for investors.

When it comes to cash flow, ensure you can easily pay your own rent plus any shortfall between your rental property income and your investment expenses, like your home loan. And if you sell, you may have to pay Capital Gains Tax, as part of your tax returns.

Cash flow management

Most property investors will be familiar with the golden rule: don’t buy without planning your cash flow and investment strategy. This means plenty of research into the property market, suburb trends and properties, your potential tax benefits, if property is the right investment for you, and how much income you think you can make long-term.

When you’ve shortlisted your properties, compare each property’s expected rental income to its outgoing expenses. If there’s a shortfall, work out if you can make up the difference in the short-term and long-term. As well as if you can cover all your expenses whenever the property’s vacant.

It's a good idea to talk to your accountant about your plans, or get personal financial advice, to increase your chance of becoming a successful investor. You can also request a callback, or call us through the Westpac App to skip the security questions (simply tap Contact us > Your loans or New product enquiry > Home loan).

What's positive gearing?

A self-sustaining rental property that brings in enough rent to cover its expenses – like maintenance costs, property management fees, home loan interest and repayments – so there's no need to cover any shortfalls each month.

Research positive cash flow hotspots, then investigate what’s driving that market, the rental yield, supply and demand ratios, vacancy rates etc.

What's negative gearing?

If your total rent received is likely to be lower than your property's total ongoing expenses, you'll need to cover the shortfall. It's called 'negative gearing' and it isn't necessarily a bad thing if you’re in a high income tax bracket. That said, if you plan to break even, your cash flow shortfall needs to be lower than your property’s capital growth.

Tips for buying an investment property

Every successful investment journey starts with solid research and planning.

Understand past and current property markets

Talk with your accountant or financial advisor about your investment strategy, cash flow plan and tax benefits

Invest with your head not your heart: today’s unfashionable capital city or suburb might be tomorrow’s hotspot

Consider a buyer’s agent to help with the search and property purchase

Is this your first property? Read our beginner’s guide to property investing

Already have property? Here’s more on using equity to buy and keeping your current home as an investment.

When you have a property shortlist

Be realistic about property values, rental demand, price growth and how much income it’ll generate

Estimate your rental yield

Speak with local real estate agents and property managers

Understand the current process of buying a property.

Need help with your property portfolio? Request a callback – or call through the Westpac App to skip the security questions (simply tap Contact us > Your loans or New product enquiry > Home loan).

Articles for Property Investors

Things you should know

Conditions, credit criteria, fees and charges apply. Terms and conditions available on request. Based on Westpac's credit criteria, residential lending is not available for Non-Australian Resident borrowers. This information has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness of the information and, if necessary, seek appropriate professional advice. This includes any tax consequences arising from any promotions for investors and customers should seek independent advice on any taxation matters. Credit provided by Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714

Key Fact Sheet for Home Loans

^*Comparison rate: The comparison rate is based on a loan of $150,000 over the term of 25 years. 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.

*** Interest Only in Advance: Subject to Bank's approval and normal lending criteria apply. Interest Only in Advance interest rates and discounts apply to new Fixed Rate Investment Property Loans and loans which have been switched into Interest Only in Advance products. Existing fixed loans are not eligible unless the loan is re-fixed. Discounts are subject to change.

⁺LVR stands for the loan-to-value ratio. LVR is the amount of your loan compared to the Bank’s valuation of your property offered to secure your loan expressed as a percentage. Home loan rates for new loans are set based on the initial LVR and won’t change during the life of the loan as the LVR changes.

^#Premier Advantage Package: Conditions of Use and $395 annual package fee applies. You must either hold or be approved for a Westpac Choice transaction account in order to qualify and continue to receive the benefits of the Premier Advantage Package. Applicants must have a Westpac Choice transaction account linked to the home loan at the time of settlement and must keep this account open for 60 days after settlement. Before deciding to acquire a Westpac Choice account, read the terms and conditions, and consider whether the product is right for you. Tax consequences may arise from this promotion for investors and customers should seek independent advice on any taxation matters.
Premier Advantage Package Conditions of Use (PDF 89KB)

^{^}Flexi First Option special offer rates with Principal & Interest repayments

Special offers are only available on new Flexi First Option Home and Investment Loans with Principal & Interest repayments. Discounts do not apply to internal refinances or switches within the Westpac Group, which includes refinances from Westpac, St.George, Bank of Melbourne, BankSA and RAMS. Not available to company and trust account holders. Offer may be varied or withdrawn at any time. Interest rates are subject to change:

For a property to live in (Owner occupier): Offer commences 24/11/2023. Includes a 1.64% p.a. discount for two years from the loan settlement date, at the end of the period it will revert to a 1.24% p.a. discount for the life of the loan.
For an investment property: Offer commences 24/11/2023. Includes a 1.89% p.a. discount for two years from the loan settlement date, at the end of the period it will revert to a 1.49% p.a. discount for the life of the loan.

Flexi First Option special offer rates with Interest Only repayments

Special offers are only available on new Flexi First Option Home and Investment Loans with Interest Only repayments. Discounts do not apply to internal refinances or switches within the Westpac Group, which includes refinances from Westpac, St.George, Bank of Melbourne, BankSA and RAMS. Not available to company and trust account holders. Offer may be varied or withdrawn at any time. Interest rates are subject to change:

For a property to live in (Owner Occupier): Offer commences 5/06/2020. Includes a 0.53% p.a. discount off our Flexi First Option Home Loan Variable Rate with Interest Only repayments for the life of loan. Interest rates are subject to change.
For an investment property: Offer commences 24/11/2023. Includes a 1.65% p.a. discount for two years from the loan settlement date, at the end of the period it will revert to a 1.25% p.a. discount for the life of loan.

^{^^}Fixed rate home loan: The Bank will apply the fixed rate that is available at the loan settlement date, unless the customer locks a fixed rate in on the loan using our Rate Lock feature. The Fixed Rate - Lock-In fee is 0.10% of the loan amount. At the end of the fixed rate period the interest rate will convert to the applicable variable home loan interest rate unless a new fixed rate term is selected and then the fixed rate is determined two business days prior to the refix. Interest rate(s) displayed is for Australian Residents only. Rate lock is not available for progress draw loans under the construction option.

If at any time before the end of a fixed rate period you switch to another product, interest rate (fixed or variable) or repayment type, then a break cost and administration fee may apply. 

¹Break costs on prepayments and switching: Customers can make total prepayments of up to $15,000 (cumulative) for loans fixed prior to 21 March 2009, $25,000 (cumulative) for loans fixed between 21 March 2009 and 16 March 2012 or $30,000 (cumulative) for loans fixed on or after 17 March 2012, without costs or fees applying. Prepayments exceeding this threshold may incur a break cost and administration fee.

³Redraw facility: if you have ‘available funds’ (you’ve made extra home loan repayments) and you’ve activated your redraw facility, you’re free to redraw them with no redraw fee. Read our Redraw Authority form (PDF 66KB) for full details.

The output or result of this calculator:

Is subject to the assumptions, which are subject to change.
Is prepared without knowing your personal financial circumstances. Before you act on the output of this calculator, please consider if it’s right for you. If you need more information, please call 131 900. We recommend you talk with your financial adviser before taking out a loan.
Doesn’t represent a quote or pre-qualification for a loan.
Might not be taken into account if you apply for a loan with us, as we’ll make our own calculations. When assessing ability to service a loan, Westpac may use an interest rate that’s higher than the current interest rate for the loan you’ve requested.

The interest rates used in the calculator:

Are current, as shown on our home loan interest rate pages
Are Westpac's standard interest rates, and include any package or promotional discounts
Are subject to change.

Investing in property

Featured basic variable rate