Category: Articles

How to buy an investment property with little to no deposit

The team at Naritas are often asked “is it possible to get 100% finance for an investment property”? Pros and cons aside, the short answer is that it is certainly possible to finance a very large percentage of a property – over 100% – but the potential finance costs can be considerable and need to be balanced against the risks & potential returns. Described below is a rough guide as to a common approach, the general qualification criteria and the estimated costs in today’s market.


For as little as $8000 upfront it is possible to get approval for a $400,000 investment property.

Borrower prerequisites:

  1. Must be a property owner with at least 5% equity in the property you own. The property won’t be refinanced or have its debt restructured, however, the equity is necessary to demonstrate you have tangible net wealth.
  2. Must have at least $8,000 in cash to meet costs associated with the proposed investment purchase such as LMI and due diligence costs such as paying for your solicitor/conveyancer and pre-purchase inspections.
  3. Minimum $100,000p.a. income for the primary applicant, or a minimum of $140,000 combined income for a couple.
  4. Clean credit with a minimum of a moderate to strong credit rating.

General approach:

  1. Select a property you wish to purchase for $400,000 with a minimum rental return of $300 per week. Exclude properties outside of metropolitan areas, that are located in high density apartment blocks (i.e. blocks with more than 4 stories and/or more than 30 units), are under 60sqm internal size (which means usually select properties that are 1BR+), and that have flood ratings. Some examples of potentially acceptable properties can be found here and here.
  2. Apply for a personal loan of $35,000 over the maximum term allowable, ideally 7 years. Estimated rate would be around 10%.p.a. (give or take 5%p.a. dependent on the strength of your credit profile). NB: Speak with a credit adviser as many personal loan providers will not lend for a home deposit and the difference in delivery rates in this space can be considerable.
  3. Subsequent to being approved for the personal loan seek approval for a $380,000 mortgage at 95% LVR plus LMI.

What do the costs look like?

  • Estimated LMI of ~$16,000 NB: You should consult with your taxation adviser as to whether this LMI premium can be claimed against your taxation liability).
  • Estimated stamp duty, state fees and charges of ~$20,500 (this figure will alter slightly dependent on the state you are considering buying into – you can calculate these costs using the calculator located here).
  • Estimated investment variable rate: 8.09% p.a. NB: This rate could be reduced to 5.34%p.a. if you increased your cash (i.e. savings) available for the purchase to $22,000 (up from $8,000).

How do I get assistance with getting approved?

The team at Naritas are experts in delivering timely guidance & finance approvals.  We have over 100 lenders on our panel & a high quality team of dedicated advisers to steer you efficiently through the approval process.

To make an enquiry online with our team, click here. Alternatively please feel free to phone us on 1300 558 887 during business hours.