An investment loan is judged on structure before price: which loan carries the debt, whether it is interest-only, where the offset sits and how the next purchase will be funded. The rules changed in 2026. For residential property bought after 12 May 2026, other than new builds, rental losses will no longer offset wages from 1 July 2027, and the 50 per cent CGT discount is replaced. We model the loan around those rules with your accountant, then negotiate it across 90+ lenders.
The tax and lending settings that now shape an investment loan. Tax figures are for discussion with your accountant; we arrange the finance.
Figures checked October 2026 against the sources shown. Rules change; we re-check before every application.
Interest-only keeps cash flow and deductible debt high while you pay down non-deductible debt on your home; principal and interest costs a little less in rate and builds equity. Most lenders cap interest-only at five years and assess you on the P&I repayments over the remaining term, so it is harder to qualify for, not easier.
The classic structure is interest-only on the investment loan with every spare dollar in an offset against the home loan. Once the home is paid off, the same money moves to the investment offset. If you have no non-deductible debt, P&I usually wins. There is no regulator cap on interest-only lending any more, just lender policy and a small rate premium.
They change the after-tax cash flow, not the lending rules. If you buy an established property after 12 May 2026, rental losses from 1 July 2027 are carried forward against future rental income or gains rather than offsetting your salary. New builds are exempt, and anything you held before 12 May 2026 is grandfathered. The lender still assesses the loan the same way.
What it changes in practice: a negatively geared established property now needs to stand up on its own cash flow, which pushes buyers toward higher-yield stock, new builds, or paying down enough debt to break even. From 1 July 2027 the 50 per cent CGT discount is replaced by indexation plus a 30 per cent minimum rate on gains accruing after that date. We are not tax agents; we build the loan around the plan you and your accountant agree, and we are happy to join that conversation.
Yes, and it is how most Melbourne investors start. The lender takes a separate split against your home for the deposit and costs, usually to 80 per cent of its value, and a second loan secured on the investment property for the rest. Keeping the splits separate is what makes the interest traceable and deductible.
Avoid cross-collateralising the two properties under one loan if you can. It is simpler for the bank and worse for you: selling or refinancing one later means revaluing both, and the bank controls where the sale proceeds go. Stand-alone securities with a separate equity split cost nothing extra and keep your options open.
Lenders add a share of the expected rent (usually 70 to 80 per cent of it) to your income, test the new loan plus every existing loan at the rate plus 3 points, and generally lend to 80 per cent of value without LMI or 90 per cent with it. The rent helps, but the buffer and your existing debt decide the figure.
Lenders differ widely on how they treat existing investment debt, rental income and negative gearing add-backs, so the same person can be approved for $400,000 at one bank and $700,000 at another. That spread is the main reason to use a broker for a second or third property.
Interest, plus land tax from a $50,000 site-value threshold with fixed charges of $500 or $975 to 2033, plus rates, insurance, management at 5 to 8 per cent of rent, and the vacant residential land tax of 1 to 3 per cent of capital improved value if it sits empty. Melbourne gross yields sit in the high threes, so most leveraged purchases run at a cash loss.
With the negative gearing change ahead, that cash loss matters more. We model holding costs with the loan at today's rate and at the rate plus 3 points, so you can see what a tenant leaving or a rate rise does before you bid.
“We don't just find you a loan; we create a solution that fits.”Suvidh Arora
The Cinch five steps, with structure decided before any lender sees the application.
Equity release, interest-only or P&I, offset placement and stand-alone security, agreed with you and your accountant.
Lenders compared on how they treat your rent and existing debt, not just rate. Pre-approval so you can bid.
Splits set up for traceability, then an annual review as rates, rents and the tax rules move.
Straight answers. If yours isn't here, ask cinchi (bottom right) or book a chat.
Structured, placed, reviewed. A cinch.
I'm cinchi, Cinch Loans' AI assistant. I explain how Australian home loans and finance work, and when a question needs a current figure I check trusted sources like MoneySmart, Housing Australia, the RBA and the state revenue offices, and show you where it came from. Suvidh and the team give the actual advice. Your questions are saved so they can pick up where we left off, and when a question needs a person, I'll put you straight through on WhatsApp.
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cinchi is an AI assistant. It can be wrong. Figures are quoted from the source shown and change over time. Nothing here is personal credit advice or an offer of credit. Credit Guide · Privacy · Talk to Suvidh