If you live or work in Liverpool and want to buy an investment apartment, the loan structure matters as much as the apartment itself. Getting that part right early saves you stress later.
Your time is tight, so we will keep this practical and focus on the choices you will actually face.
How Much Can You Borrow for an Investment Apartment?
Your investment loan amount depends on your income, your debts, your living costs and how the lender treats the rent. Lenders regulated by APRA must test your ability to repay at a rate at least 3.0 percentage points above the loan's actual rate.
That buffer applies to authorised deposit-taking institutions such as banks, credit unions and building societies. Non-bank lenders are not bound by it, though they set their own rules. Rent helps, but lenders generally count only part of it. APRA's guidance is that prudent lenders count no more than 80 per cent of expected rent, to allow for gaps between tenants.
Existing debts count too. Credit card limits, for example, can reduce what you can borrow even if you pay the card off every month. You can get a feel for your numbers with our borrowing capacity page before you start inspecting apartments.
Interest Only or Principal and Interest: Which Suits an Investor?
Interest only means you pay just the interest for a set period, while principal and interest means each repayment also reduces the loan. Neither is right for everyone, and each has a cost.
With interest only, your repayments are lower at first, but the loan balance stays the same. Lenders also assess interest-only loans as if you were repaying principal and interest over the shorter remaining term. So a 30-year loan with a 5-year interest-only period is tested over 25 years. This means interest only does not lift how much you can borrow.
On tax, the interest on money borrowed for a rental property is deductible while the property is rented or available for rent. The principal part of a repayment is not deductible. Please speak with your accountant about how this plays out for you, as it depends on your situation.
Here is an illustrative example at 6.75% p.a. on a $500,000 loan, using the same rate for both. Interest only costs about $2,813 a month. Principal and interest over 30 years costs about $3,243 a month. That is roughly $430 a month more, and that extra money is reducing your debt.
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Book a chat with a Finance & Mortgage Broker at Red Sea Lending today.
Do You Need a Deposit, and When Does LMI Apply?
Lenders mortgage insurance is generally required when you borrow more than 80 per cent of the property's value. Lenders set their own LVR policies, and 80 per cent is not a legal limit on borrowing.
If you borrow above that, both the lender and the insurer must approve the loan. You pay the premium, and its size depends on the loan amount and the loan-to-value ratio (LVR). Stamp duty may also apply to the premium in some places.
Some lenders may waive LMI for certain professions, including medical ones. That is a lender decision, so ask us to check which lenders do this and on what terms for your role.
The trade-off is simple. A smaller deposit gets you into the market sooner, but you pay for LMI and borrow more. A larger deposit keeps costs down but takes longer to save.
What Changed for Negative Gearing on Investment Properties?
Negative gearing rules changed in 2026, and the date you buy now affects how you can use any rental loss. Always confirm your position with your accountant.
Losses on residential investments held at 7:30pm AEST on 12 May 2026, including those under contract at that time, can still be deducted against other income such as your salary. Eligible new builds bought after that date keep this treatment as well. A new build includes dwellings on previously vacant land, or ones that replace a property and increase the number of dwellings.
For established residential properties bought after that time, the rules change from the 2027-28 income year. Net rental losses can then only be used against other residential property income, including residential capital gains. Excess losses carry forward. Until 30 June 2027, properties bought between 12 May 2026 and that date can still be negatively geared under the current rules.
Capital gains tax also changes from 1 July 2027. The 50 per cent discount is replaced by cost base indexation and a 30 per cent minimum tax rate on real gains from that date. Gains before that date are treated under the current rules. This affects how you plan to hold and sell, so it is worth a proper chat with your accountant.
Why Body Corporate Costs Belong in Your Numbers
Body corporate fees are a running cost of owning an apartment, and they reduce what is left from your rent. You should account for them in your own budget, alongside loan interest, insurance, council rates and management fees.
Keep a buffer for vacancies too, so you can carry the loan comfortably even if the apartment sits empty for a few weeks.
An offset account can also help. It reduces the interest charged on the loan, which also means the deductible interest is lower. The trade-off is that an offset can come with a higher rate or a fee, depending on the lender. We compare these for you.
Fixed or Variable Rate for an Investment Loan
A variable rate moves with the lender's decisions, while a fixed rate locks in your repayment for a set time. Each has a downside.
Variable loans usually offer more flexibility, but your repayments can rise. Fixed loans give certainty, but features such as extra repayments or offset accounts may be limited, and leaving early can trigger break costs. Splitting the loan across both is a common option. Ask us how a split would work with each lender.
If you already own an investment loan, a loan health check or a look at refinancing can show whether your current setup still suits you. You can also read more about our investment loans service.
Talk to a Local Broker in Liverpool
Our Liverpool mortgage broker team can compare lenders on our panel and work around your roster. Call one of our team or book an appointment at a time that works for you.
Frequently Asked Questions
How much of the rent do lenders count?
APRA's guidance is that prudent lenders count no more than 80 per cent of expected rent. Each lender sets its own policy beyond that.
Does interest only increase how much I can borrow?
No. Lenders assess interest-only loans on principal and interest repayments over the remaining term, so borrowing capacity does not rise. Repayments are lower during the interest-only period, but the balance stays the same.
When do I need lenders mortgage insurance?
It is generally required when you borrow more than 80 per cent of the property's value. The premium is paid by the borrower and depends on the loan amount and LVR.
Did negative gearing rules change?
Yes. Properties held at 7:30pm AEST on 12 May 2026 and eligible new builds keep current treatment. From the 2027-28 income year, losses on established properties bought after that time can only offset residential property income. Check with your accountant.
