Home Loans

Buying An Investment Property


Step 1

How much can I borrow?

Like any property purchase, buying an investment property requires research and planning. Your earnings and financial commitments, like the mortgage on your home, need to be taken into consideration when calculating how much you can afford to invest.

When calculating your borrowing power, also factor in if you’ll be able to service the loan if the property is untenanted and you’re not earning any rent.

Important information Important information Show content

Results are based on a single, full time PAYG income with no dependants. Any upfront costs that may be associated with the loan are capitalised in the loan amount. The results from this calculator should be used as an indication only. Results do not represent either quotes or pre-qualifications for a loan. The actual amount you can borrow may vary depending on factors including your verifiable net income, other debts or liabilities you have and the number of dependents you have. Lending is to approved applicants only and all lending is subject to a detailed credit assessment.

Fees and charges are payable. The calculations do not take into account fees, charges or other amounts that may be charged to your loan (such as establishment or monthly service fees or stamp duty). If you are borrowing more than 80% of the value of the property, Lenders Mortgage Insurance may apply. Any of these additional amounts will increase repayments under the loan. .

Repayment is for principal and interest and is indicative only based on the stated information. Changes in interest rates, repayment frequency and loan term will affect the repayment amount.


Expense Details and Default Values
The calculator initially assumes that the borrower has a minimum set of annual expenses of $17,004.
Maximum percentage of income available - currently set at 100% of income

All months are assumed to be equal. In reality, many loans accrue on a daily basis this can lead to varying interest in different months.

Number of Weeks & Fortnights in a Year
One year is assumed to contain exactly 52 weeks or 26 fortnights. Thus the assumption is for a 364 day year.

The calculator uses the unrounded payment to derive the amount of interest accrued over the full term of the deposit, however, institutions round repayments to the nearest cent.

Important information Important information Show content

The calculations provided are estimates only and based upon the information entered into the calculator by the user. The calculations do not include upfront or continuing credit fees and charges. The resulting calculations do not constitute a loan application or variation to an existing CUA facility, loan offer or loan approval.

Rates current as at 23 August 2018 and subject to change.

Your needs and financial circumstances have not been taken into account. Terms, conditions and Lending critieria apply and are available on application. Other fees and charges may apply. A General Information , Terms & Conditions brochure and Schedule of Fees are available online or from your local CUA branch. You should read both these documents before deciding whether to purchase this product, issued by CUA.

Comparison rate calculated on a $150,000 secured loan over a term of 25 years based on monthly repayments. 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.

Where to buy
Research the area where you’re looking to invest. Is it close to public transport, local schools, shops and hospitals? Contact the local council to find out about planned developments and projects in the area.
If you have an area in mind, speak to local property managers. Get an understanding of the rental returns for the type of property you’re looking to buy, the demand and supply and vacancy rates.

Get your free property or suburb profile report

We can help you with a free Property Report using the latest property market data, including:
  • Estimated value
  • Property details
  • Suburb insights
  • Sales & rental history
  • Comparable sales results

Get your free property or suburb profile report

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CUA Property Profile reports are for personal domestic use only. This publication contains materials, content, data and information [CoreLogic Data] provided by RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic). Credit Union Australia Limited. AFSL and Australian credit licence: 238317.

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Step 2

How much will I need upfront?

As well as your repayments, investment properties come with other considerations and costs. When working out your investment strategy, weigh up the short and long-term costs. These may include:

  • Stamp duty
  • Strata fees
  • Loan establishment fee
  • Mortgage insurance
  • Legal and conveyancing fees
  • Building and pest inspections
  • Property management and estate agent fees
  • Landlord insurance
  • Building insurance
  • Maintenance

Important information Important information Show content

The results from this calculator should be used as an indication only and is based on the accuracy of the information you provided.

Things to consider
If you already own a property you may be able to use the equity as a deposit to purchase an investment property. Equity is the current market value of your property minus the amount you still owe on your loan. You’ll also need to work out the Loan to Valuation Ratio (LVR) as you won’t be able to access all the equity in your property.
Generally, if you want to borrow more than 80% of the current market value of the property, you may need Lenders’ Mortgage Insurance (LMI). This can vary for investment loans, so talk to your lender.

Step 3

What is the best loan for me?

When reviewing loans for investment purposes, you may require certain features and added flexibility. Below are some options to consider for investment loans.
Interest only

If you want to keep your repayments to a minimum, an interest-only option may work best for you. It allows the rent from your investment property to cover more of your loan. Your loan principal will not be reduced but the equity in your property might go up if house prices rise in the long term. Keep in mind interest-only repayments are usually payable monthly.

Fixed rate loans

A fixed rate loan gives you more certainty because you know exactly what your repayments are for a set period of time so you can plan. However, if you change financial institutions, sell your home, or pay off your loan within the period, you may have to pay an early payout fee.

Variable rate loans

A variable rate loan gives you more flexibility, but leaves you open to changes in interest rates. You can usually access more features – like the ability to make extra repayments at no cost, and the flexibility to pay off or move your home loan without penalty or break fees (but they may have a discharge fee).

Split loans

You can choose to split your loan and place a portion on a fixed rate and a portion on a variable rate. This allows you to manage some of the risk of an interest rate rise with the fixed rate loan, while still having the flexibility of the variable rate loan.

Invest the right way for you
Like any investment decision, buying an investment property comes with a level of risk. Before you make a decision, it’s a good idea to speak to a financial advisor. They’ll be able to advise on how to structure your finances and the implications of positive and negative gearing, depreciation and capital gains tax.

Which home loan suits me?

Will this be your primary place of residence?
Do you want a fixed or variable rate?
Do you require an offset facility?
Do you require a redraw facility?

Your results

Interest rate
Comparison rate*

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Important information Important information Show content

This is only intended as a general guide in relation to issues you may want to consider. It is not intended to be an exhaustive list of all relevant issues and you should take into account your own particular circumstances, and obtain independent expert legal advice where needed, before proceeding.

Rates current as at 23 August 2018 and subject to change.

Loans are issued by Credit Union Australia Ltd ABN 44 087 650 959 AFSL and Australian Credit License 238317 to approved applicants only. Lending criteria, terms, conditions, fees and charges apply. Ask us for details.

The "Choose your own CUA home loan" tool is an indication only. Results do not represent pre-qualification for a home loan.

* Comparison rate calculated on a $150,000 secured loan over a term of 25 years based on monthly repayments. 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.

# On expiration of the fixed period, loan reverts to the relevant Standard Variable Principal & Interest repayment rate.

Δ Maximum Loan to Value Ratio (LVR) is inclusive of Lenders Mortgage Insurance (LMI) where applicable. Maximums based on standard security. Lower LVR limits apply for non-standard security types.

>< Offset is not available on all home loan products. You must maintain a minimum balance of $500 in each offset account to obtain the benefit of the offset from that account. Your offset account will not earn any interest.

>| A $200 minimum withdrawal amount applies for redraws conducted in-branch.

>> A daily transfer will refund any amounts paid in advance in excess of the total advance repayments allowed during the fixed rate period (being $50,000 for Premium Fixed and $5,000 for Fixed) unless sufficient to pay out the loan in full (in which case an Early Payout Fee may apply). Excess funds will be transferred to the nominated deposit account, which must remain open for the fixed rate period.

>|> For Premium Fixed Home Loans, any amount in excess of $50,000 in offset accounts will not be taken into account when calculating interest.

1 Available to new loans of $100,000 or more. Maximum LVR limits apply based on standard security types. New loans only. Offers not available for switching of existing CUA home loans or to applicants for another CUA home loan fully approved prior to 04/07/2018 . Rates vary by repayment type (principal and interest vs interest only) and construction loans.

2 You must maintain a minimum balance of $500 in each offset account to obtain an offset benefit. The maximum in your offset accounts that is able to be offset against your Balanced Variable home loan when calculating interest is $15,000. Offset account balances in excess of $15,000 will not be taken into account when calculating interest on your loan. You will also not receive any interest on the funds in your offset accounts.

3 Loan establishment fee of $600 waived until fee waiver offer withdrawn. Security administration fee ($195) and other fees may apply.