Top 10 Ways to Refinance Your Investment Property

Investment properties in Marmion have performed solidly over the past few years, but many landlords are still sitting on loan structures that made sense three years ago and drain cash now.

If you bought or refinanced during the fixed rate rush, your circumstances have probably changed. Rental yields shift, interest rates move, and equity builds. The loan that worked when you settled might now be costing you thousands in unnecessary interest or locking away equity you could deploy elsewhere.

Why Investment Property Refinancing Works Differently

Investment loans are assessed on serviceability, not just equity. Lenders look at rental income, your personal income, existing debts, and the property's location. A loan that suits an owner-occupier rarely suits a landlord because tax treatment, cashflow priorities, and risk profiles are completely different.

Consider an investor who bought in Marmion a few years back with a standard variable loan. Rental income covers most of the mortgage, but there's no offset account attached. Every dollar of rent sits in a savings account earning interest that gets taxed, while the mortgage runs at a higher rate. Switching to a loan with an offset account means rental income reduces the interest charged on a non-deductible debt elsewhere, or simply cuts the interest bill on the investment loan itself. The tax outcome and cashflow both improve without changing the repayment amount.

Accessing Equity Without Selling

Many Marmion investors hold properties that have appreciated but don't realise they can access that equity to fund the next purchase. If your property has increased in value and you've paid down the loan, a refinance lets you borrow against that equity without selling.

Lenders typically allow you to access up to 80% of the property's current value, minus what you still owe. That equity can become the deposit for another investment property, fund renovations that lift rental yield, or consolidate other higher-cost debts. The key is structuring the loan so the interest remains deductible and the repayments still work within your cashflow.

Coming Off a Fixed Rate Into a Higher Variable Rate

If your fixed rate period is ending, you'll revert to your lender's standard variable rate unless you act. That reversion rate is almost always higher than what new customers get, and it's rarely the most suitable product for an investment property.

We regularly see landlords revert to rates that are half a percent or more above what they could access by refinancing. On a loan amount of $500,000, that's over $2,500 a year in additional interest. You're not locked in once the fixed period ends. Refinancing before or just after expiry gives you access to current pricing and lets you reassess whether a variable, fixed, or split structure suits your situation now.

Consolidating Debt to Improve Cashflow

Investors often carry a mix of debts: the investment mortgage, a car loan, maybe some residual credit card debt. When lenders assess your serviceability for the next purchase, they count every repayment. Consolidating those debts into your investment loan can reduce your total monthly repayments and improve your borrowing capacity.

The interest on the consolidated portion isn't tax-deductible unless the debt was used for investment purposes, so this strategy works when the goal is cashflow improvement or preparing to borrow again. A broker can structure the loan so the deductible and non-deductible portions are clear for tax time.

Switching Loan Features That No Longer Fit

Investment loans come with different features depending on the lender. Some offer offset accounts, others offer redraw. Some allow extra repayments without penalty, others lock you in. The features that suited you at purchase might not suit you now.

If you're planning to buy another property soon, an offset account gives you somewhere to park savings without reducing your borrowing capacity. If you've built up cash in a redraw facility, some lenders treat that as reduced debt, which can lower how much they'll lend you next time. Refinancing lets you move to a product with the features that align with your current strategy.

Reviewing Loan Structures as Your Portfolio Grows

Once you own multiple properties, loan structure becomes more important. Some investors keep each property on a separate loan with separate security. Others cross-securitise to access higher leverage. Both approaches have trade-offs, and the right one depends on whether you're still acquiring or holding long-term.

Marmion's proximity to the coast and strong local schools make it a solid hold for long-term capital growth. If you're planning to keep the property and buy more, structuring your loans so each property can be sold or refinanced independently gives you flexibility later. Refinancing is the point where you can unwind cross-securitisation or separate loans that were bundled together early on.

Locking in Rates When Fixed Products Become Attractive

Variable rates give you flexibility, but they also expose you to rate rises. If you're holding an investment property long-term and want certainty over repayments, fixing part or all of the loan can make sense when fixed rates are priced attractively relative to variable.

Splitting the loan between fixed and variable gives you some certainty while keeping access to offset and redraw on the variable portion. Refinancing is when you can restructure into a split if your current lender doesn't offer it or their fixed rates aren't suitable.

Improving Your Interest Rate After Building Equity

Lenders price loans based on risk. The more equity you have, the lower the rate you can access. If you bought with a 10% deposit and you've since paid down the loan or the property has increased in value, your loan-to-value ratio has dropped. That puts you in a lower risk category, which means you qualify for pricing that wasn't available when you first borrowed.

A loan health check shows where your current loan sits compared to what's available now. Many investors assume their lender will automatically offer them a lower rate as their equity improves. They don't. You need to ask, or you need to move.

Using a Broker to Compare Across Lenders

Investment loan policies vary significantly between lenders. Some lenders assess rental income at 80% of the actual rent, others use 100%. Some lenders have postcode restrictions, others don't. Some lenders allow you to borrow up to 90% for investment purposes with lender's mortgage insurance, others cap you at 80%.

A broker who works with Marmion investors regularly knows which lenders will support your situation and which will decline it before you waste time on an application. We handle the paperwork, liaise with the lender, and make sure the refinance settles without disrupting your rental arrangement.

When Refinancing Doesn't Make Sense

Not every situation calls for a refinance. If you're planning to sell within the next 12 months, the cost and time involved might outweigh the benefit. If your current loan has significant break costs because you're still in a fixed period, those costs might exceed the interest savings. If your circumstances have changed and you no longer meet lending criteria, refinancing might not be possible right now.

A conversation with a broker helps you work out whether refinancing makes sense based on your actual numbers, not general assumptions. We'll calculate the break costs, compare what you'd save, and tell you whether it's worth proceeding or whether you should wait.

Call one of our team or book an appointment at a time that works for you. We'll review your current loan, show you what's available, and structure a refinance that aligns with where your portfolio is heading.

Frequently Asked Questions