The Challenge

Priya was an IT professional with a stable salary, a growing superannuation balance and a home she had owned for several years. She had watched property values rise and wanted to start building long-term wealth by purchasing her first investment property.

There were two things holding her back. First, although she earned a good income, she did not have a large pool of cash savings ready for a deposit. Second, she was unsure how much she could actually borrow for an investment, and how to structure the loans so that her home and her investment stayed separate.

Priya wanted to invest without putting her own home at unnecessary risk, and without tying up her finances in a way that would limit her in the future.

Finding the Right Solution

After reviewing Priya’s income, expenses and the equity in her existing home, our broker mapped out a clear path forward. Her home had increased in value and her loan balance was modest, which meant she had usable equity available.

Rather than waiting years to save a cash deposit, Priya could release a portion of that equity to fund the deposit and purchase costs on the investment property. We then set up a separate investment loan secured against the new property, keeping the two loans distinct.

We also factored in the expected rental income, which lenders count towards servicing, and compared lenders to find one that assessed her position favourably and offered a competitive investment rate. We explained how an interest-only period could support her cash flow in the early years, and encouraged her to confirm the tax treatment of the investment loan with her accountant.

The Application Process

We prepared the application with both the equity release on her home and the new investment loan in mind, presenting a clear picture of her income, existing commitments and the projected rental return.

Because investment lending involves additional servicing checks, we made sure the numbers were laid out clearly, so the lender could assess her capacity with confidence.

The lender approved both the equity release and the investment loan, allowing Priya to proceed to purchase without needing to find a large cash deposit.