Investment Loans

Some FAQ Investing in Property Questions

Can I use the equity in my home as a deposit?

With the recent property boom, many home owners have seen a large increase in the equity they have in their property. Instead of finding a cash deposit to buy an investment property, you could use this equity as the deposit. Equity is the value of an asset not subject to any lender’s interest. For example, a property worth $500,000 with a mortgage loan of $150,000 has equity of $350,000.

What fees and charges should I consider?

Costs such as establishment fees, solicitor fees and stamp duty which can add up to several thousand dollars.

Instead of trying to find cash to pay these fees, take them into account in your borrowings. That means you don't need thousands upon thousands of dollars in savings to get started.

What is negative gearing?

A property is negatively geared when the costs of owning it – interest on the loan, bank charges, maintenance, repairs and capital depreciation – exceeds the income it produces. Simply put, your investment must make a loss before you can claim a tax benefit.

What is positive gearing?

Positive Gearing occurs when the investment income exceeds your interest expense (and other possible deductions). Note that you may be subject to additional tax on any income derived from a positively geared investment.

You should also consider any other costs involved when deciding on your investment property strategy.

 More information on your Investment loan:

• Mortgage Choice Loan Calculators
• Can a holiday home be a good investment?
• Download Property Investor Guide