How much can I borrow for an investment property?

For many people, the decision to invest in property is an obvious one and they are keen to get involved once they have answered the basic question as to what property they can afford – i.e. how much they can borrow.

There are a number of potential investors who would simply go to any of the myriad of online calculators to get a baseline idea as to their borrowing capacity and provide some basic information such as:

Number of applicants (e.g. you on your own or you and your partner)

Number of dependants

  1. Gross salary and other income (inc. rental income) for each applicant
  2. Monthly payments for each applicant (inc. credit card/credit card limit)

But please note that the calculator is pretty simple and doesn’t take into account the following…

  1. Whether the loan is for owner occupiers or investment purposes
  2. The rates currently on offer, and
  3. Any product features, fees or charges

In that light then, this basic calculator is really designed for unsophisticated, uncomplicated scenarios (like the instance where you are looking to buy your first home) and won’t give you an indication of the range of options you have as an investor, especially taking into account using your existing property as part of the strategy. The most important point to note is that, if you already own your own home, or have other investment properties to offer as security, you may be able to use your equity in these properties to increase your borrowing power. Further to that, given some more sophisticated modelling to take into account expected rental returns and the positive benefits/impact of negative gearing, your options may become even more attractive and exciting.

Onyx can look at your current portfolio and tell you how much you can actually borrow and help you put a plan in to place for upcoming investments. Contact us for a free assessment of your current situation.

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