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Structure first.
Then the rate.

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.

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Investing in October 2026.

The tax and lending settings that now shape an investment loan. Tax figures are for discussion with your accountant; we arrange the finance.

12 May2026Residential property acquired after 7.30pm on this date (other than new builds) loses negative gearing against wages from 1 July 2027; earlier holdings are grandfatheredATO

1 Jul2027The 50 per cent CGT discount is replaced by cost-base indexation and a 30 per cent minimum tax on gains accruing from this date; earlier gains keep the discountATO

+0.2ptsGap between investor and owner-occupier rates on outstanding loans (6.44 vs 6.21 per cent), narrower than most investors assumeRBA F6, Aug 2026

$50kVictorian land tax threshold on total site value; $500 or $975 fixed charges apply to 2033 under the COVID debt levySRO Victoria

1–3%Vacant residential land tax on capital improved value, statewide since 1 January 2025, escalating each consecutive vacant yearSRO Victoria

1.9%Melbourne rental vacancy rate in September 2026, up from a year earlier; asking rents up 5.7 per cent over the year but slightly down over the monthSQM Research, Oct 2026

Figures checked October 2026 against the sources shown. Rules change; we re-check before every application.

Interest-only or principal and interest for an investment loan?

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.

How do the 2026 negative gearing and CGT changes affect my loan?

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.

Can I use equity in my home as the deposit?

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.

How much can I borrow for an investment property?

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.

What does an investment property cost to hold in Victoria?

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

How we set up an investment loan.

The Cinch five steps, with structure decided before any lender sees the application.

Structure

Equity release, interest-only or P&I, offset placement and stand-alone security, agreed with you and your accountant.

Place

Lenders compared on how they treat your rent and existing debt, not just rate. Pre-approval so you can bid.

Settle and review

Splits set up for traceability, then an annual review as rates, rents and the tax rules move.

Investment loan questions.

Straight answers. If yours isn't here, ask cinchi (bottom right) or book a chat.

01Do investors pay higher interest rates?+

Slightly. The RBA's August 2026 data shows outstanding investor loans about 0.2 points above owner-occupier loans; interest-only adds a little more. The gap is smaller than most people expect and worth negotiating.

02Can I buy an investment property with a 10 per cent deposit?+

Many lenders go to 90 per cent of value for investors with LMI; a few go to 95. Equity in another property can replace the cash deposit entirely.

03Should I buy in a trust or company?+

That is a question for your accountant: trusts complicate land tax in Victoria (a $25,000 threshold and surcharge rates) and fewer lenders accept them. We arrange finance for individuals, trusts and companies once the structure is decided.

04What is rental yield and what counts as good in Melbourne?+

Annual rent divided by price. Melbourne dwellings sit roughly between 3.5 and 4 per cent gross, units higher than houses. A yield below the loan rate means the property costs you cash to hold.

05Can I refinance my investment loan to a better rate?+

Yes, and investors should review annually. Keep the loan separate from your home loan when you do, so the interest stays clearly deductible.

06Do you give tax advice?+

No. We are mortgage and finance brokers, not tax agents or financial planners. We explain how the rules affect the loan structure and work with your accountant on the rest.

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Structured, placed, reviewed. A cinch.