Your first investment purchase, step by step
Investment loans are assessed differently to home loans. Getting the structure right from the start gives your portfolio the best chance to grow.
Where you stand
You do not need to be wealthy, own a home already or earn a huge salary. Lenders look at your overall position, including your income, living expenses, existing debts, deposit or usable equity and the rent the property is expected to earn.
For educational purposes only. Open the full calculator for more detail.
How lenders work out your borrowing power
Your borrowing power comes down to your income, living expenses, existing debts and the portion of the property's expected rent that the lender accepts.
APRA-regulated lenders currently assess repayments using a serviceability buffer of at least 3 percentage points above the loan's interest rate. They also apply living-expense benchmarks and account for relevant liabilities, including credit card limits, car loans, personal loans and HECS/HELP repayments.
This is why two people earning the same salary can have very different borrowing power. Online calculators provide a useful starting estimate, but each lender treats rental income, bonuses, overtime, expenses and existing debts differently.
We compare more than 50 lenders to identify policies suited to your circumstances and longer-term plans. That gives you a realistic price range before you start making offers.
Start with the borrowing capacity calculator, then read how much you can borrow for an investment property to understand what can move the number.
Can you use equity instead of cash?
If your home has grown in value, usable equity may help fund the deposit and purchase costs for your first investment, reducing the amount you need from savings.
Equity is the difference between what your home is worth and what you still owe on it. Lenders will typically allow you to access up to around 80% of the value, minus your current loan balance. That accessible portion is called usable equity.
If a lender values your home at $900,000 and you owe $500,000, 80% of the value is $720,000. That gives you around $220,000 in usable equity before fees and lender limits.
How much you can access, and whether it is enough for the deposit and costs, depends on your borrowing power, the investment property and the lender's policy. A common approach is a separate loan split against your home for the deposit, plus a new loan against the investment property, rather than tying both properties together.
Accessing equity increases your total borrowing, so repayments on both loans need to fit your budget. We model that before anything is lodged. Work out your starting position with the accessible equity calculator, or read our guide to using equity to buy an investment property.
Not sure where you stand? Take the 2-minute Investor Ready Quiz.
Your options
Beyond your deposit, budget for transfer duty, conveyancing, inspections, lender fees and, where applicable, LMI. There is no single amount that works for every purchase because the amount varies by state, property price, lender and ownership circumstances. We do find that a 12% deposit plus costs is the sweet spot for first-time investors.
The optimal deposit
You don't need a 20% deposit. We get you in sooner and let your asset compound.
The right structure
We structure your first loan for where you want to go long-term.
Fast pre-approval
Know your budget and be ready to act the moment the right property comes up.
The right lender
We search 50+ lenders, including those that best suit first-time investors.
| Cost | What it is for | What affects the cost |
|---|---|---|
| Stamp duty | State or territory transfer duty | Location, property price and buyer circumstances |
| Legal and conveyancing | Contract review and settlement | Provider, property and purchase complexity |
| Building and pest inspection | Checking the property's condition | Property type, location and inspection scope |
| Loan and lender fees | Application, valuation and settlement | Lender, loan and valuation requirements |
| LMI, where applicable | One-off premium that protects the lender | Loan amount, LVR, lender and insurer |
A few of these decisions deserve more than a paragraph. Explore the guides below for a clearer look at loan structure, tax changes, rentvesting and the common mistakes to avoid before your first purchase.
How LMI and LVR affect your deposit
At or below 80% LVR, lenders mortgage insurance (LMI) generally is not required. Above 80% LVR, LMI may apply, although lender policies and exceptions vary.
On a $600,000 purchase, a 20% deposit is $120,000, while a 10% deposit is $60,000. Purchase costs apply in both cases, and LMI may also apply at the higher LVR.
LMI is a one-off premium that protects the lender, not you. It may be added to the loan, subject to the lender's policy and maximum LVR. Whether buying sooner with LMI or waiting for a larger deposit suits you depends on your budget, goals and risk tolerance.
For a more detailed estimate, read our guide to how much deposit you need for an investment property or use the property purchase costs calculator.
How we get you there
Six steps. You'll always know where things are up to, and you deal with Scott directly the whole way through.
A no-pressure conversation with Scott about your goals, your situation and what's possible. No documents needed yet, just the questions you actually have.
We work out your borrowing power, usable equity or deposit position and an all-in budget that includes stamp duty and purchase costs, so you can search within a realistic price range.
We compare suitable lenders and design the loan structure, repayment type and features, and we work in with your accountant on the right ownership structure for the investment.
Pre-approval gives you a conditional guide to your budget, not a guarantee of final approval. When you find a property, we help you understand the finance implications and manage the next steps with the lender.
Once you've signed a contract, we manage the valuation and full application through to unconditional approval, keeping you updated at every step.
We coordinate with your conveyancer through to settlement day. Afterwards, we review your loan regularly so the structure keeps working as rates and your plans change.
What our clients say
You deal with Scott directly, start to finish. The investors who've already made their first purchase say it best.
“As a first-time property investor, I had a lot of questions and didn’t really know where to begin. Scott made everything easy to understand and clearly explained my borrowing capacity, the different loan options and how…”
Investment purchase questions, answered
The questions first-time investors ask us most.
Do I need a big income to start?
Is an investment loan different from a normal home loan?
Do lenders count rental income when I apply?
What is LMI and can I avoid it?
What does a mortgage broker cost?
Last updated: July 2026
This page is general information only. It doesn't take into account your objectives, financial situation or needs, and it isn't credit, financial or tax advice. Figures are indicative estimates that vary by lender, state and property and can change, so we confirm your real numbers before you act. For tax questions, speak to a registered tax agent or accountant. Scott Lung, credit representative 567904 of Purple Circle Financial Services Pty Ltd (Australian Credit Licence 486112).
Ready to buy your first investment property?
Book a free discovery call and we'll help you understand your options, answer your questions and map out your next steps.