How much can I borrow for an investment property? In the September quarter of 2025, the average new investment loan in Australia was $685,634. Whether a figure like that is anywhere near yours comes down to a calculation most first-time investors have never seen run. A lender takes your income, subtracts your living costs and every debt you already carry, applies its own assumptions about interest rates and repayments, and hands back an estimate. The rent a property could earn can count towards the result. Some of your income may not count at all. And if your deposit is thin, lenders mortgage insurance can land on top of the purchase.
This article walks through how that estimate gets built, where investment properties change it, what the data says about what investors actually borrow, and how to turn two or three different calculator results into one budget you can plan around.
What lenders mean by borrowing power
Borrowing power, sometimes called borrowing capacity, is a lender's estimate of the most you can borrow based on your financial situation. The calculator pages carry the same core warning, and it is worth reading once. CommBank's says the result is an estimate provided as a guide only and not a loan approval, and that the calculation assumes interest rates do not change over the life of the loan. ANZ's goes further: its figure should not be taken as a guarantee you could borrow that amount.
Underneath the disclaimers, the inputs are unglamorous: your income, your living expenses, your existing debts, the interest rate and the loan term.
The assumptions that trim the estimate
The differences between lenders live in the assumptions wrapped around those inputs. NAB sets its assumptions out in plain terms, and three of them quietly reduce the number you get:
A buffer on the interest rate. NAB builds a buffer into its calculation to factor in, to some degree, the effect of possible rate rises on what you could afford.
A floor under your expenses. If the living costs you enter are less than NAB's Household Expenditure Measure, a benchmark sourced from the Melbourne Institute, the benchmark figure is used instead. Understating the grocery bill gains you nothing.
Income that does not count. Where income such as overtime or commission is not considered consistent, it can be left out of the assessment.
What changes when the property is an investment
The rent enters the calculation. For investment loans, NAB's calculator may take into account an assumed net rental position after tax, which can lift the estimate where a property gears positively and lower it where it gears negatively. The rent is an assumption, not a promise, so be suspicious of any deal that only works on the optimistic figure.
You are assessed as an investor. Select an investment property in ANZ's calculator and the assessment switches onto that bank's residential investment property loan rate rather than its owner-occupied one.
Interest-only runs through it twice. Interest-only lending is largely an investor habit: around 40 per cent of new investor lending since 2018 has been interest-only, against 8 to 12 per cent for owner-occupiers. The choice shows up in the estimate on both sides. NAB assumes every loan you already hold runs principal-and-interest for its full life, and notes this can overstate your borrowing power if your actual loan has an interest-only period. ANZ makes the mirror point about the new loan: the estimate comes out differently if the repayments are interest-only.
What investors actually borrow
The averages are one story and the distribution is another. The ABS counted 57,624 new investment loans in the September quarter of 2025, a record in both number and value, with investment loans running at around 40 per cent of all new lending. That was up 13.6 per cent on the previous quarter and 12.3 per cent through the year. Growth came from every state and territory, led by the ACT at 27.8 per cent and New South Wales at 19.0 per cent.
Behind the record sits a very uneven spread of debt. Households with a single leveraged investment property carry the smallest loads, a median of around $220,000 in outstanding debt. The heaviest group, investors with multiple investment properties plus a loan still outstanding on their own home, make up only 10 per cent of investor households yet hold a median of $1 million in debt. Around 80 per cent of investors hold at least one leveraged property, and over a third owe money on both their home and their investment. Investors generally carry more debt relative to income than owner-occupiers, yet have historically defaulted less, partly because they tend to have higher incomes and bigger financial buffers.
There is also a published line for when borrowing gets heavy. The RBA and APRA class a housing debt-to-income ratio above 6 as higher risk. As of 2021, around 20 per cent of leveraged investors sat above it, counting debts across all their investment properties as well as their own home, though the RBA notes high debt-to-income lending has decreased since then. You can place yourself before any calculator: total up everything you would owe with the new loan included, divide by your annual income, and see which side of 6 you land on.
Turning two or three estimates into one budget
Run more than one calculator, because the assumptions differ bank by bank: one adds a rate buffer, another switches rates by property type, another leaves every fee out of the result. Where the outputs disagree, work from the lowest and you will never be planning on the most optimistic number in the pile.
Enter living costs honestly, since the expenditure floor means understating them buys you nothing. Decide interest-only versus principal-and-interest before you run the numbers, because the repayment type changes the estimate.
And keep the loan figure separate from the cash figure. NAB states that its calculation takes no fees or charges into account, and that stamp duty and potentially lenders mortgage insurance would increase the overall cost. With a deposit under 20 per cent of the property value, you may be required to pay lenders mortgage insurance. Book an independent building and pest inspection into the budget too; it belongs there on every purchase.
Where the number goes next
A borrowing figure is an input, not a plan. The same budget supports very different outcomes depending on which suburbs it is aimed at, what yield they produce and what risks come with them, and that decision is what determines whether the investment works.
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