Refinancing an investment property means moving the loan to a new lender to cut the rate, release equity for the next purchase, or roll over an expiring interest-only period. Investors are assessed more conservatively than owner-occupiers: lenders count only 80% to 90% of gross rent, apply debt-to-income caps of roughly 6 to 8 times income, and generally cap investment lending at 90% LVR. Interest remains deductible provided the funds stay tied to the income-producing purpose.
Investment rates carry a premium over owner-occupied, and lenders reprice existing customers less aggressively than new ones. Across a multi-property portfolio, a 0.4% reduction compounds quickly.
The most common reason. Releasing usable equity from an appreciated property funds the deposit on the next one without contributing cash savings.
When an interest-only period ends, repayments step up sharply because principal must be repaid over a shorter remaining term. Refinancing can extend interest-only, subject to reassessment.
Separating properties that were tied together by a previous lender, restoring your ability to sell or refinance one without touching the rest.
An investor who was approved three years ago can fail the same assessment today without anything changing in their circumstances. Serviceability rules tightened and buffer rates rose.
This is why the sequence of lenders matters for a portfolio investor. Approaching the most restrictive lender first, being declined, and then approaching others leaves a trail of enquiries that makes each subsequent application harder.
The deductibility of interest follows the use of the borrowed funds, not the property securing them. A refinance is the point at which a clean structure is most easily contaminated.
We set the splits up so the structure is clean, but the tax treatment itself is your accountant's call. Have that conversation before settlement rather than at tax time, because the structure is far harder to fix afterwards.
| Cost | Typical range | Note |
|---|---|---|
| Discharge fee (outgoing lender) | $300 – $400 | Charged per loan, so multiplies across a portfolio |
| Valuation (incoming lender) | $300 – $600 per property | Often waived on lower-LVR refinances |
| Mortgage registration and discharge | $150 – $400 per property | Set by the state land titles office |
| Break costs (fixed loans only) | Can be substantial | Calculated from the rate movement since fixing — always request a quote first |
| Establishment fee (incoming lender) | $0 – $600 | Frequently waived as part of a refinance offer |
Break costs on a fixed investment loan can run to thousands and are the one cost that can make a refinance uneconomic. Ask your current lender for a written break cost figure before committing to anything.
Yes. You refinance to a higher balance and take the difference as a separate facility, usually up to 80% of the property value to avoid Lenders Mortgage Insurance. Keeping the released amount in its own split preserves the deductibility of the original loan.
Serviceability rules tightened and buffer rates rose. Lenders now stress-test at roughly the actual rate plus 3%, count only 80% to 90% of gross rent, and apply debt-to-income caps of 6 to 8 times income. The same portfolio can fail an assessment it passed three years ago.
Refinancing the same balance for the same purpose does not change deductibility. Increasing the loan for a private purpose creates a mixed loan requiring annual apportionment. Keep any new borrowing in a separate split and confirm the treatment with your accountant.
Often yes, but you are reassessed as a new application. The lender stress-tests you at the principal and interest repayment that will apply after the new interest-only period ends, over a shorter remaining term, which is a harder test than the original one.
Not necessarily. Each additional loan adds discharge, valuation and registration costs, and a single lender taking the whole portfolio can recreate the concentration you were trying to avoid. Sequencing depends on your DTI headroom and each loan's current rate.
Usually by refinancing each property to standalone security, often across more than one lender. It requires enough equity in each property to stand alone at an acceptable LVR, and the order in which you do it matters, because each move changes your remaining serviceability.
Your Kreddi Score models your position against actual DTI limits and rental shading policy across our panel, so you know which lenders will take the refinance before you spend an enquiry finding out.
NIK Finance Pty Ltd (ACN 685 393 917) is a Credit Representative (567387) of Finsure Finance & Insurance Pty Ltd (Australian Credit Licence 384704). This page is general information only and does not constitute financial advice. Consider your personal circumstances and speak with a licensed broker before applying for credit.