Borrowing through a company structure gives you legal separation between your personal assets and your property portfolio.
That separation can protect personal wealth if things go wrong with a tenant or property, and it can make estate planning more flexible down the track. But lenders treat company borrowing differently to personal lending, and those differences shape how much you can borrow, what you pay, and how the loan is structured. The decision turns on whether the benefits of limited liability and structural control outweigh the higher cost and reduced borrowing capacity that typically come with a company loan.
How Lenders Assess Company Borrowing Capacity
Lenders assess a company's capacity to service an investment loan based on rental income from the property being purchased and, in most cases, the personal income and assets of the company directors who guarantee the loan. The company itself rarely has sufficient income or assets to support the loan without director guarantees, especially for investors building a portfolio rather than operating an established property business.
Consider an investor purchasing a unit that generates $28,000 in annual rent. The lender will apply a vacancy rate and other adjustments, then assess whether the net rental income can cover the loan repayments at the assessment rate, which is the loan product rate plus a 3.0 percentage point serviceability buffer. If the rental income falls short, the lender looks to the guarantor's personal income to make up the difference. That means your borrowing capacity in a company name is usually lower than borrowing the same amount in your personal name, because the lender can only count rental income and guaranteed income, not your full personal cashflow without the added scrutiny of the guarantee obligation.
Some lenders will also assess the company's existing debt and liabilities, including any other investment loans held by the company. If the company holds multiple properties, the lender aggregates the rental income and debt serviceability across the portfolio. The director guarantee remains a requirement for most residential lenders, which means you remain personally liable for the debt even though the loan is in the company's name.
Interest Rates and Loan Products for Company Borrowers
Company investment loans typically attract interest rates that are 0.10 to 0.50 percentage points higher than equivalent loans to individual borrowers, depending on the lender and the loan-to-value ratio. Not all lenders offer residential investment loans to companies, and those that do often limit product features such as offset accounts or require higher deposits.
In our experience, investors borrowing in a company name have access to variable and fixed rate products, but interest-only terms are shorter and offset accounts are less common. Some lenders cap the interest-only period at three years for company borrowers, compared to five years for individuals. Fixed rate options are available, but the rate differential means you're paying more for the certainty compared to a personal borrower locking in the same term.
The reduced product range also affects your ability to refinance your investment property later. Fewer lenders means less competition, which can limit your leverage when negotiating rate discounts or seeking better loan features as your portfolio grows.
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Loan-to-Value Limits and Lenders Mortgage Insurance
Most lenders cap company borrowing at 80 per cent LVR without requiring Lenders Mortgage Insurance, and some lenders will not lend to a company structure above that threshold at all. Where LMI is available for company borrowers, the premium is higher than for individual borrowers at the same LVR, and the range of LMI providers willing to cover company loans is narrower.
An investor purchasing a property at $650,000 through a company would typically need a $130,000 deposit plus settlement costs to stay within the 80 per cent LVR threshold. Borrowing above that level, if available, could add several thousand dollars in LMI premiums on top of the already higher interest rate. The combined effect is that expanding your property portfolio in a company name requires more upfront capital and higher ongoing costs than the same strategy in personal names or a trust structure.
Tax Treatment and Deductibility of Company Investment Loans
Interest on a company investment loan is deductible against the company's assessable income, which includes rental income from the property. From the 2027-28 income year, established residential investment properties acquired by a company after 12 May 2026 are subject to the negative gearing restrictions introduced under the Treasury Laws Amendment (Tax Reform No. 1) Act 2026. Losses from those properties can only be offset against other residential property income, not against other company income such as trading revenue or dividends.
Properties acquired before 12 May 2026, or eligible new builds acquired after that date, remain fully deductible against all company income. The distinction matters if you're using the company to hold both property and other investments or business activities. A company holding established investment properties acquired after the cut-off date will need to quarantine residential property losses and carry them forward until there is sufficient residential property income to absorb them.
Companies pay tax at a flat rate of 25 per cent for base rate entities or 30 per cent otherwise, rather than the marginal rates that apply to individuals. That removes the tax benefit of negative gearing for high-income earners, but it can simplify tax planning if the company is part of a broader structure. Capital gains realised by a company do not attract the CGT discount available to individuals, so the full gain is taxed at the company rate. For properties sold after 1 July 2027, the new cost base indexation rules apply, which can reduce the real gain subject to tax.
Director Guarantees and Personal Liability
Every residential lender offering investment loans to companies requires the directors to provide personal guarantees securing the loan. The guarantee makes you personally liable for the full debt if the company defaults, which removes much of the limited liability protection that the company structure was intended to provide.
The guarantee is registered on your personal credit file and is treated as a contingent liability when you apply for other lending, including home loans or further investment loans in your personal name. That affects your personal borrowing capacity because the lender must assess your ability to service the guaranteed debt as if it were your own. In a scenario where the company holds three properties with a combined debt of $1.8 million, all of that debt sits as a contingent liability against your personal serviceability, even though the rental income and loan repayments flow through the company.
If the property market declines and the company cannot meet its loan obligations, the lender can pursue you personally for the shortfall after selling the property. The company structure does not shield you from that outcome. The protection it does offer is against third-party claims such as tenant injury or contract disputes, where the claimant must pursue the company rather than your personal assets, subject to the limits of corporate law.
When Company Borrowing Fits Your Wealth Strategy
Company structures make sense for investors who plan to build a significant portfolio, want to separate property assets from personal assets for estate or succession planning, or need the flexibility to bring in other investors or shareholders later without restructuring. The cost and complexity are justified when the investor is treating property as a long-term wealth strategy rather than a single purchase.
In our experience, investors borrowing through a company are typically holding properties for capital growth over decades, not cashflow in the short term. They accept the higher interest rate and reduced borrowing capacity because the structure delivers benefits that personal ownership or a discretionary trust cannot. If you're buying your first investment property and testing the market, a company structure is usually premature. If you're building a portfolio with a 10 or 20 year horizon, the structure can support that strategy.
Call one of our team or book an appointment at a time that works for you. We'll review your investment goals, compare the lending options available in a company name against personal or trust borrowing, and structure the loan to fit the role this property plays in your broader wealth plan.
Frequently Asked Questions
Can I borrow more in a company name than in my personal name?
No, borrowing capacity in a company name is usually lower because lenders assess rental income and director guarantees rather than your full personal cashflow. The director guarantee creates a contingent liability that also affects your personal borrowing capacity for other loans.
Do I still have personal liability if I borrow through a company?
Yes, all residential lenders require directors to provide personal guarantees, which make you personally liable for the full debt if the company defaults. The guarantee is registered on your credit file and treated as a contingent liability when you apply for other lending.
Are interest rates higher for company investment loans?
Yes, company investment loans typically attract rates 0.10 to 0.50 percentage points higher than equivalent loans to individuals. Product features such as offset accounts and longer interest-only terms are also less common or unavailable for company borrowers.
Can I claim negative gearing on a company investment loan?
From the 2027-28 income year, losses from established residential properties acquired by a company after 12 May 2026 can only be offset against other residential property income, not other company income. Properties acquired before that date or eligible new builds remain fully deductible.
What deposit do I need to borrow in a company name?
Most lenders cap company borrowing at 80 per cent LVR without Lenders Mortgage Insurance, so you typically need at least a 20 per cent deposit plus settlement costs. Some lenders will not lend to a company structure above 80 per cent LVR at all.
