Investment loans
An investment loan is built for return, not just for owning a home. Interest-only structures, offset accounts and new-build depreciation all change the maths in an investor's favour.
Last updated 14 June 2026
An investment loan is a home loan structured for return, commonly interest-only with an offset account to maximise deductible interest and cashflow. The Property Plug arranges investment lending for new builds, granny flats and dual-income property across WA, where depreciation and yield are strongest. This is general information, not credit or tax advice.
How investors structure a loan
Owner-occupiers pay down a home. Investors manage a position. The structure of the loan, interest-only versus principal and interest, offset versus redraw, fixed versus variable, is a lever on cashflow and tax, not an afterthought. The right setup depends on whether you are chasing growth, income, or both.
- Interest only keeps repayments and deductible interest high while you hold for growth, then reviews at the end of the term.
- Offset account parks spare cash against the loan to cut interest without reducing the deductible balance.
- Principal and interest builds equity faster and usually carries a lower rate, suiting longer holds and lower-risk investors.
- Equity release uses the equity in an existing property as the deposit, so you may not need new cash.
Depreciation and yield favour building new
A new build hands an investor two advantages an established property cannot. The building and its fixtures attract substantial depreciation deductions in the early years, and a new home rents well with little maintenance. Together they can lift a near-neutral pre-tax cashflow into a positive after-tax return.
| Factor | New build | Established |
|---|---|---|
| Depreciation on building | Strong, full early-year deductions | Limited or none |
| Maintenance, early years | Low | Higher, ageing stock |
| Rental appeal | High, modern stock | Variable |
| Stamp duty | On land only if build is separate | On full price |
Depreciation requires a quantity surveyor's schedule. Not tax advice. Last updated 14 June 2026.
Dual income and granny flats
The sharpest yield play in Perth is putting two incomes on one block. A dual-key home has two self-contained dwellings under one title. A granny flat (an ancillary dwelling up to 70m2 in WA, rentable separately) adds a second income for a fraction of a second purchase. On a $560,000 build renting at $650 a week the gross yield sits near 6.0%, and a second income lifts the combined return higher again.
Model your numbers in the yield and cashflow calculator, then size the loan with the repayment calculator.
This is general information only and does not take into account your objectives, financial situation or needs. It is not credit assistance or a credit quote. Consider whether it is right for you and seek advice. Finance is arranged through Central Lending Solutions, the licensed credit partner The Property Plug works with (Australian Credit Licence or credit representative number [TBC]).
Should an investment loan be interest only or principal and interest?
Many investors choose interest only to maximise deductible interest and cashflow while holding for growth, then review at the end of the interest-only term. Principal and interest builds equity faster and usually carries a lower rate. The right choice depends on your tax position and goals, which we work through on a call.
How does an offset account help an investor?
An offset account is a transaction account linked to your loan. Money sitting in it reduces the interest charged without being a repayment, so you keep flexibility and still cut interest. For investors it lets you park funds while preserving the deductible loan balance, which can be more tax-effective than paying the loan down directly.
Why do new builds suit investors?
A new build carries strong depreciation deductions on the building and fixtures, low maintenance in the early years, and often a stronger rental yield than tired established stock. Those deductions can turn a near-neutral pre-tax cashflow into a positive after-tax position, which is the core investor case for building new.
What is a dual-income or dual-key property?
A dual-key home has two self-contained dwellings under one roof or title, each rented separately, while a granny flat adds a second dwelling to a block. Both put two incomes on one piece of land, lifting the combined yield well above a single dwelling for a much smaller outlay than a second purchase.
How much deposit do I need for an investment loan?
Typically 10% to 20%. A 20% deposit avoids LMI and gives the most lender choice, while some lenders go to 90% on investment with LMI. Many investors use equity in an existing property instead of cash. We size your deposit and equity position before you commit.
Structure an investment that pays
Book a free call. We bring suburb yield and growth data, model the after-tax cashflow, and match a new build, granny flat and loan built for return.