Lenders assess investment loans by property type before they assess you.
A two-bedroom unit in a high-rise tower borrows differently to a freestanding house on a corner block. The structure, strata profile, and rental demand shape the loan amount you can access, the deposit you need, and whether the lender will even proceed. Choosing the right property type for your investment loan is as much a financing decision as it is a portfolio decision.
Houses and Townhouses: The Foundation of Most Investment Portfolios
Freestanding houses and attached townhouses generate the widest lender appetite and the most competitive investor interest rates. Most lenders will advance up to 90 per cent of the purchase price on a standard house in an established Brisbane suburb, provided you meet serviceability and can cover Lenders Mortgage Insurance. Townhouses typically borrow the same way, though some lenders apply loan amount caps or tighter LVR limits where body corporate levies exceed a threshold, usually around $8,000 per year.
Consider a Brisbane investor acquiring a three-bedroom townhouse in a complex of six. Rental income is strong, vacancy rate is low, and the property sits on a small lot with individual title. That investor can often access the full suite of investment loan features, including interest only terms, offset accounts, and rate discounts that reflect the lower credit risk weighting lenders assign to this property type.
Units in Blocks Over Three Storeys: Where Lender Appetite Starts to Narrow
Units in apartment buildings attract more restrictive investment loan products once the building exceeds three storeys or contains more than 50 dwellings. Lenders apply additional scrutiny because high-density buildings carry concentration risk, higher body corporate fees, and less certain resale value if the market softens. Some lenders cap the loan to value ratio at 80 per cent for units in buildings over six storeys, even where the investor has a 15 per cent deposit and strong rental income.
In our experience, investors purchasing units in Fortitude Valley or South Brisbane often find their borrowing capacity reduced by 10 to 15 per cent compared to a house at the same purchase price. That reduction stems from higher levies, which lenders deduct from rental income when calculating serviceability, and from the lender's internal property policy, which may classify the unit as a higher-risk security. The investor deposit often increases to 15 or 20 per cent to avoid LMI or secure a workable interest rate.
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Studio Apartments and Serviced Apartments: Limited Lender Panel and Higher Deposits
Studio apartments under 50 square metres and serviced apartment complexes with hotel-style management fall outside most major lenders' residential investment loan criteria. The property may generate passive income, but lenders view it as non-standard security. You will need a 30 to 40 per cent investor deposit in most cases, and the loan amount will be capped even where your income supports a larger borrowing.
Some second-tier lenders and non-bank lenders will consider these property types, but the variable interest rate is often 50 to 100 basis points higher than a standard residential rate, and interest only periods are shorter or unavailable. If your property investment strategy depends on leverage and tax benefits through negative gearing, these structures erode the advantage.
Dual Occupancy and Duplex Properties: Single Title Versus Strata
A duplex on a single title borrows as a house. A duplex on two strata titles borrows as two separate units, even if you acquire both halves simultaneously. That distinction changes your loan structure, your deposit requirement, and the way lenders calculate rental income.
Where you buy both dwellings on separate titles, some lenders will treat the second purchase as portfolio lending and apply a higher interest rate or a lower maximum LVR. Others will lend against each property independently, provided the combined loan amount does not push your debt-to-income ratio above six times your gross income, which is the current APRA lending limit for more than 80 per cent of all new investor loans.
If the duplex sits on one title and you rent both dwellings, lenders aggregate the rental income and assess the property as a single security. This usually results in a higher loan amount and lower deposit compared to the strata scenario, because the lender holds one mortgage and faces less administrative cost if enforcement is required.
New Builds Versus Established Properties: Deposit, Valuation Risk, and Tax Treatment
New builds purchased off the plan or as house and land packages attract different investor borrowing terms to established properties. Lenders will often approve a loan at 90 per cent LVR on a new build where the contract price reflects the completed value, but valuation risk is higher. If the valuer assesses the completed property below the contract price at settlement, the shortfall must be covered by additional equity or cash, or the loan amount is reduced.
From a tax perspective, new builds acquired after 12 May 2026 retain full negative gearing benefits against all income, while established investment properties purchased after that date can only offset losses against other residential property income from the 2027-28 financial year onward. That legislative change has shifted some investor demand toward new construction, but the borrowing structure and deposit size remain property-specific.
Depreciation on new builds is substantially higher than on established properties, which increases claimable expenses and can turn a modestly negative cash flow into a neutral or positive position after tax. Lenders do not factor depreciation into serviceability, but the after-tax outcome matters when you are holding the asset long-term to build wealth through capital growth and rental yield.
Rural and Regional Investment Properties: Postcode Restrictions and LVR Caps
Some lenders exclude certain regional postcodes from their residential investment loan panel, or cap the LVR at 70 to 80 per cent regardless of the borrower's financial position. Properties in towns with populations under 10,000, or in postcodes with high vacancy rates or economic dependence on a single industry, are flagged as higher risk.
If you are considering an investment property outside greater Brisbane, confirm lender appetite before you exchange contracts. A property in Toowoomba or the Sunshine Coast hinterland may require a larger investor deposit or limit your ability to refinance down the track if fewer lenders will touch the postcode.
Loan Features That Vary by Property Type
Interest only terms, offset accounts, and the ability to leverage equity for portfolio growth depend on the property type securing the loan. A standard house in Paddington will give you access to interest only repayments for up to five years, an offset account, and the option to refinance your investment property later to release equity for your next acquisition.
A studio apartment in the CBD might lock you into principal and interest repayments from day one, with no offset and limited refinance options once you have built equity. The property type determines the loan structure, and the loan structure determines whether the investment delivers the tax benefits and financial freedom you are targeting.
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Frequently Asked Questions
Do lenders treat houses and units differently for investment loans?
Lenders typically offer more competitive interest rates and higher loan to value ratios for houses and townhouses compared to units in high-rise buildings. Units often attract higher body corporate fees and concentration risk, which can reduce your borrowing capacity by 10 to 15 per cent.
Can I borrow 90 per cent on a new build investment property?
Most lenders will approve a 90 per cent LVR on a new build, but valuation risk is higher. If the property is valued below the contract price at settlement, you will need to cover the shortfall with additional equity or cash.
What deposit do I need for a studio apartment investment loan?
Studio apartments under 50 square metres usually require a 30 to 40 per cent deposit because most major lenders classify them as non-standard security. Interest rates are also typically 50 to 100 basis points higher than standard residential investment loans.
How does a duplex on single title borrow compared to two strata titles?
A duplex on single title borrows as one property with aggregated rental income, usually resulting in a higher loan amount and lower deposit. Two strata titles are assessed as separate securities, and some lenders apply portfolio lending rates or tighter LVR limits on the second property.
Why do some lenders restrict loans on regional investment properties?
Lenders may exclude regional postcodes or cap the LVR at 70 to 80 per cent due to higher vacancy rates, lower population, or economic dependence on a single industry. This limits both your initial borrowing and future refinancing options.
