When comparing an investment property, the Reserve Bank’s cash rate is useful context—but it is not the interest rate a particular borrower will receive. Lender pricing, loan structure, deposit, income, expenses and assessment rules all affect the actual cost and borrowing capacity. Before committing to a property, stress-test the finance using figures supplied for your circumstances.
Market check, 28 October 2026: the RBA cash rate target is 4.60 per cent, effective 30 September 2026. The target can change at a future policy meeting; this figure is a dated snapshot, not a forecast. Check the RBA cash rate page for the latest decision.
Seven finance checks before buying an investment property
- Get your own loan figures. Ask your lender or mortgage broker to explain the rate, comparison rate, fees, repayment type and conditions that apply to you. Do not use the RBA cash rate as a substitute for a loan quote.
- Test repayment changes. Ask for repayments under your actual loan terms and model higher-rate scenarios, such as an increase of 0.25 or 0.50 percentage points. These are sensitivity checks, not predictions about the RBA or your lender.
- Check serviceability without optimistic rent assumptions. A lender may assess rental income differently from the advertised estimate. Ask how expected rent is treated, and do not assume every room or dwelling will be occupied all year.
- Include costs beyond the loan. Allow for rates, insurance, management, repairs, body corporate or community fees where applicable, utilities paid by the owner, leasing costs and periods without rent. Our guide to rental yield and cash flow explains why gross rent alone does not show the full holding position.
- Keep a cash buffer. Consider how you would handle a vacancy, a repair or a delay in income without relying on a quick resale or immediate rent increase. Choose a buffer with professional advice that fits your finances.
- Check construction and settlement timing. For a new build or off-the-plan option, ask the lender how construction payments, progress draws, completion dates and settlement affect approvals and repayments. Confirm the contract timetable and expiry dates for any finance approval.
- Compare the full loan structure. Understand variable or fixed periods, interest-only terms if relevant, fees, offset or redraw conditions and what happens when a fixed period ends. A lower initial payment does not necessarily mean a lower total cost.
Use tools carefully
The Australian Government’s Moneysmart mortgage calculator can help illustrate repayments when you enter the loan assumptions. It cannot approve a loan, account for every lender’s rules or replace personalised advice. Check that its inputs match the product and repayment schedule you are comparing.
For a dual occupancy, duplex, dual-key or co-living layout, also verify the property’s actual configuration, approvals, estimated rent and availability. Separate rental income should not be assumed simply because a design has multiple living areas. Ask the lender and relevant professionals how the specific property and contract are treated.
Before you enquire about a property
Prepare a short list of finance questions: What price and costs are included? What is the expected timeline? Which rental assumptions have evidence? What information does my lender need to assess this property? DHPI’s dual occupancy and duplex pages show options to compare. Listing details and availability can change; contact DHPI to confirm the current information for a specific property.
Frequently asked questions
Does the RBA cash rate equal my investment loan rate?
No. Lenders set their own rates and terms, and the rate offered to a borrower depends on the loan and borrower’s circumstances.
Should I wait for a rate cut before researching property?
No one can reliably promise when rates will change. You can use the time to check your borrowing position, compare property costs and test scenarios with your lender or broker.
Can expected rent cover my loan repayments?
That depends on the actual rent achieved, vacancy, operating costs, loan terms, tax position and your circumstances. Seek independent professional advice and do not rely on a marketing estimate as guaranteed income.
This article is general information only and is not personal financial, tax, legal, credit or lending advice. Obtain advice from appropriately qualified professionals before making a financial decision.
