fbpx Skip to content

Investment Property Loan Newcastle

Get a better interest rate on your investment property loan and build wealth faster with Watson Mortgages. We’re the team that property investors can count on for success.

Watson Mortgages Logo
Property Investment loan

Achieve more from your investment property

Let us help you get a competitive rate

Why should I invest in property?

There’s never been a better time to invest in property. Interest rates are at a historical low, opening up the housing market to those who may have struggled to purchase before. 

However, historically low interest rates mean the number of houses for sale on the market is in short supply – which is why it’s time to move on your investment property goals. 

Property investment has a huge range of benefits, especially in Newcastle and the Hunter. For example: 

  • Capital growth. The value of your investment property will grow over time, increasing your wealth as it does. With this income, you can purchase more investment properties, a new car or even a holiday.
  • Rental income. Suppose the rental income from tenants covers the expenses of holding the property (like loan repayments and maintenance costs). In that case, your property will be classified as positively geared, meaning you will have more money in your pocket each week.
  • Tax benefits. Investors who purchase a brand new investment property can claim depreciation (like air conditioning and hot water systems) on their taxable income. If the property is negatively geared, you can also claim the losses as a tax deduction.
  • Less volatility. Investment properties can be less volatile than other investments like shares.
  • Physical assets. You will have an investment that you can see and touch and have more control over what happens to this investment. 

If you have the funds available, investing in property can be a valuable asset to your income. With this in mind, our mortgage brokers will provide reliable recommendations and advice about home loans and property investment and match your investment goals with a promising home equity loan.

What kind of investment property loan is right for me?

If you’re new to investing, you might feel overwhelmed by the financial jargon and various investment property loans available.

Investment loans generally incur a slightly higher interest rate than owner-occupied home loans. Banks also have stricter eligibility criteria and often require a high LVR (loan-to-value ratio).

The first step in choosing an investment loan is determining what interest rate suits you best:

  • Variable interest rate loans. A variable interest rate will change as economic conditions cause the Reserve Bank of Australia (RBA) to adjust the cash rate. This is better for investors who aren’t too worried about fluctuations in their repayments and know how cash flow will change based on economic conditions.

    Variable home loan interest rates come with various additional benefits, like making additional loan repayments and redrawing cash if the unexpected happens.
  • Fixed interest rate loans. A fixed interest rate is better suited to property investors who want clarity around their principal and interest repayments so they can make budgeting easier. Many investors will choose a fixed rate to match their loan terms and products to when they plan to own the property.
  • Split-rate loans. Many investors choose to split their loan amount into multiple accounts to reap the benefits of both fixed and variable interest rates on their home loans. This can help save on the home loan interest you pay and structure your loan in a way that best suits your circumstances.
  • Interest-only repayments. With this loan, your repayments only cover the interest on the amount borrowed. For a period (like five years), you pay nothing off the amount borrowed, so it doesn’t reduce.

Our mortgage brokers can guide you on the best interest rate based on your financial situation. We have your best interests at heart, and we’re committed to setting you up for success whether you’re a first-time investor or an experienced veteran of the housing market

Property Investment
Watson Mortgages
"Watson Mortgages has helped us afford a rental property with plans for more”

Contact Watson Mortgages for an obligation-free consultation

How can I grow my wealth with an investment property?

You can increase your wealth through investment properties in several ways. For example, you can: 

  • Refinance your existing investment property. Switching loans to get a more competitive rate can help you potentially save on interest. Contact us to find out how you can do this efficiently for you.
  • Buying a new investment property. If you are pre-approved for an investment loan, know how much you can borrow, and know your expected rental income, you can start hunting for an investment property.
  • Rentvesting. With an increasingly competitive property market, many Australians are choosing to rent where they live and invest elsewhere. 

Investing has never been more flexible or convenient for Australian investors. It’s all about finding the best location to invest, being prepared for interest payments and tax requirements, and managing tenants.

Property Investment
"Watson Mortgages has helped me to refinance to afford an investment property".

Why should I choose Watson Mortgages?

Over the years, Watson Mortgages (alongside Watson Wealth and Elliot Watson Financial Planning) has become one of Newcastle’s most trusted and respectable mortgage brokers. 

Why? 

We always have our client’s best interests at heart. We listen to your goals and investment aspirations, ensuring we understand what you wish to achieve and how we can help you get there.

Whether you want to purchase your first investment property or planning to expand your wealth with new investments, our mortgage brokers will provide the recommendations and advice you need for unwavering success and lower fees. From day one, we’ll walk you through the process so you can feel confident moving forward with your investment and working towards your wealth goals. 

We are uncompromising when it comes to the quality of service we provide. We’re committed to putting you firmly on the track to success while also offering flexible choices around your investment property loan.

Our mortgage brokers are equipped with robust training and the latest information on comparing home loans, and we will bring ideas to the table you may not have considered. 

Property investment has never been simpler with Watson Mortgages. Contact us to start looking for an affordable investment home loan today. 

Investment Property
"The advice we have received has help set us up for the future.”

How can we help?

  1. We’ll help you realise your investment goals and tailor a lending strategy based on your current situation.
  2. We’ll review your property valuations to ensure your portfolio has room for growth.
  3. We’ll work with your accountant or financial advisor to ensure your investment home loan complements your taxation strategy.
  4. If required, we’ll match you with an experienced Elliot Watson Financial Planning financial planner for more confidence and security in your investment strategy.
  5. We’ll provide helpful contacts prior to investing like solicitors and building inspectors.
  6. We’ll deliver an investment home loan offer that’s both affordable and manageable.

Frequently asked questions

Where should I be looking to buy for the best return on my investment?

We’ve all heard the phrase “location, location, location” when it comes to property investment — and truly, this cannot be emphasised enough.

Generally speaking, we recommend looking into areas where you’re familiar with environmental factors affecting the property value (including the proximity to the CBD), desirable neighbourhoods and popular landmarks, or even the beach — these elements can increase the property’s value.

In contrast, properties close to a prison, an airport or a low socioeconomic area can drive the property’s price down.

Generally speaking, we recommend looking into areas you’re familiar with but have high growth, higher rental yield and low vacancy rates. This will ensure you can easily find renters to help bring down your investment property loan in Newcastle.

It would also be valuable to do some preliminary research into proposed planning changes in the near future that may impact property prices. You want to aim for positive gearing, if possible.

What kind of property should I be looking into for the best ROI?

It’s best to look for properties with appealing features for renters, like a second or third bathroom, a garage, and properties near facilities like schools, shops and public transport.

We also recommend considering maintenance costs in your research. How old is the property? Does it require further renovations to be liveable? Are there any potential problems that might arise in the future? These variables will all come into play when choosing the right investment loan for you.

What is rental yield and why does it matter?

Rental yield measures how much income your property generates as a percentage of the property’s whole value. In other words, it is how much you make off your property compared to how much it is worth.

There are two types of rental yield, gross and net:

  • Gross yield is calculated through annual rental income and property value.
  • Net yield is calculated by including all expenses involved.

 

Analysing your investment property’s expenses and potential profits is important before investing. It is best to be armed with as much information as possible.

A property’s rental yield will eventually determine your investment’s success, making it one of the most important things to understand.

If you make a high rental yield, you have more cash to spend on other investments and contribute to emergency funds and savings accounts. If you make a low rental yield, you will likely have to contribute additional funds to your investment to cover costs.

If you have a high rental yield and want to pay less interest on your mortgage, consider looking into an offset account when setting up your loan.

When is the best time to invest?

There’s no “one size fits all” answer to this question, as it all comes down to “supply and demand”. In line with economic theory, the price of a property grows when demand increases. Properties in areas with a high population will likely grow in value as demand grows.

Conversely, if properties are oversupplied in a particular area, then the prices can go down.

Research areas with high or low demand and talk to your lender about interest rates. This will set you up for future success.

What additional costs do I need to consider for an investment property?

A few ongoing costs are involved in owning an investment property, which we will consider when sourcing the right investment loan for you. These include:

  • Council and water rates
  • Building insurance
  • Landlord insurance
  • Body corporate fees
  • Land tax
  • Repairs and maintenance costs
  • Legal fees
  • Stamp duty (if applicable)
  • Searches and inspections (before purchase)
  • Registration fees (post-purchase)


Before jumping into an investment property, we will take time to analyse your current financial situation and provide recommendations to ensure you can manage these costs while also paying off your loan. 

How do I select a lender?

There are many lenders to choose from and we understand it can be hard to feel confident making a decision on such a big investment.

The good news is that Watson Mortgages can do this for you! Based on your current financial situation and property investment goals, we can help find you a reliable lender for your investment.

With more than 20 Australian lenders to choose from, our mortgage brokers will do all the legwork for you and provide recommendations and advice at no cost to you.

Do investment loans require a deposit?

Yes. Depending on the lender, loan deposits range between 5% and 20%. This assures the lender that you are committed to your investment and can repay your loan.

If you have less than a 20% deposit, you will likely incur Lenders’ Mortgage Insurance (LMI) on your investment property loan. This is an alternative method of providing reassurance to the lender. This can cost thousands of dollars on top of stamp duty, but we can provide recommendations and advice around LMI to ensure you get the best possible result from your investment insurance.

What are the tax implications of an investment property?

Various tax implications arise from owning an investment property. Considering these implications and speaking to your financial adviser before investing is important.

You must record all tax-deductible expenses and declare any rental income in your tax returns. According to the ATO, deductible expenses can include maintenance, interest on the investment property’s loan, and other expenses from owning an investment property.

This means that you will pay taxes on your income (including rental). Maintaining thorough records of all these expenses is essential right from the start.

The ATO recommends keeping records right from the start so you can meet tax obligations, work out how to divide income and expenses and pay instalments towards your end-of-year tax liabilities. 

How much can I borrow for my investment property?

This depends on many factors, including your annual income (after tax), any other income, living expenses, financial commitments, etc. Based on your current financial situation, we will provide an estimate for you in your initial appointment.

Can I redraw my loan if I run low on funds?

It depends on the lender and what kind of loan you have committed to i.e. variable or fixed interest rate. Variable interest rates allow you to pay loan payments in advance (or when you have the funds to do so) and also allow you to withdraw money from the loan.

However, if you’re a first-time investor, we recommend choosing a fixed-rate interest loan so you have more certainty over budgeting and how much is owed on regularly.

What happens if I run into financial hardship?

We understand that challenges come along when you least expect them. We primarily help with seeking and obtaining an investment property loan, and how repayments are managed is up to the lender. However, we offer frequent reviews and support to ensure you can repay your investment property loan to the best of your ability.

If you have any questions about pausing or managing your loan repayments, we’re here to help. Simply get in touch with the team from Watson Mortgages for the compassionate support you need.

What should I ask Watson Mortgages in my appointments?

We’re here to answer all your questions about property investment, credit approval, credit criteria, obtaining an investment loan and growing your wealth. Some common questions we receive include:

  • Do you offer loans from a wide range of different lenders?
  • Why did you recommend this loan to me?
  • What fees will I have to pay when taking out this loan?
  • What features (options) come with this loan? Can you show me how they work?
  • Can you show me more options including one with the lowest cost?
  • What is the threshold for lenders’ mortgage insurance (LMI) and how can I avoid it?
  • What information do I need to provide for the loan application?

I want to grow my portfolio. Where do I start?

When building wealth, the same rule always applies: whoever has the biggest property portfolio wins.

If you’re looking to build your property portfolio, it always helps to start by making a good investment. A portfolio of 100 or even 1,000 properties starts with one good investment, so start local, start small, and work with an experienced mortgage broker who can guide you in building a successful property portfolio.

At Watson Mortgages, we can provide the guidance you need to build wealth. We’ll provide recommendations and advice to help you achieve your goals, whether you want to own one house, five houses or 1000 apartments!

What documents do I need to have ready?

Applying for an investment property loan can be a time-consuming process. To get ahead of the game, we recommend having the basics ready to go to streamline the process. Lenders often ask for proof of income, bank statements, ID, and potentially tax returns if you are self-employed.

What other services do you offer?

At Watson Mortgages, we have close contacts with local financial planners, banks, lawyers and many more essential services, meaning you can access holistic service and be set on the path for success.

As well as Watson Mortgages, we also offer services via: 

No matter where you are in the investment journey, our group can help you achieve your goals in a simple and cost-effectively. 

Ready to own your own home or investment property? Get in touch with the team from Watson Mortgages today. We have an extensive and experienced team of mortgage brokers in Newcastle to provide recommendations and advice about investment property ownership and mortgage deals to set you up for success.

Investment Property Loans
"The whole process has been easy from beginning to end.”

Contact Watson Mortgages for an obligation-free consultation

Ready to own your own home or investment property? Get in touch with the team from Watson Mortgages today. We have an extensive and experienced team of mortgage brokers to provide recommendations and advice about investment property ownership and the best mortgage deals to set you up for success. 

Back To Top
Search