Do Investment Loan Applications Include Your Overtime?

Your investment loan application treats your base pay, overtime, and penalty rates differently.

Most lenders will assess your base salary at 100 per cent when you apply for an investment loan. Shift allowances and overtime are treated as variable income, and lenders typically include between 80 and 100 per cent of that income depending on their policy and your employment type. As a registered nurse or midwife working rostered shifts, the way your income is structured affects how much you can borrow, which properties you can service, and whether your application is approved without a second supporting income.

What Lenders Count as Income for an Investment Loan

Investment loans are assessed under the same serviceability framework as owner-occupier loans, meaning your income is tested against the actual loan repayments plus a serviceability buffer of at least 3.0 percentage points above the loan interest rate. Your total income from all sources is added together, then your existing debts and living expenses are deducted to arrive at your borrowing capacity.

Consider a registered nurse in Parramatta earning a base salary of $88,000 plus roughly $18,000 annually in penalty rates and overtime. A lender assessing 100 per cent of the base and 80 per cent of the shift income would recognise total income of approximately $102,400. If the same lender uses a higher variable income inclusion rate, the assessed income increases. Home loans for nurses are structured to recognise this income variability as long as the pattern is consistent and evidenced through payslips.

Investment loan applications require rental income to be factored into the serviceability equation. Lenders assess rental income at a discount to account for vacancy periods, typically including 80 per cent of the projected rent. In a suburb where rental vacancy sits below 2 per cent, that discount margin is conservative, but lenders apply it uniformly regardless of local conditions.

How Overtime and Allowances Are Verified

Lenders require at least three months of consecutive payslips showing shift allowances and overtime before they include that income in your serviceability assessment. Where income is considered variable, most lenders average the income over a 12-month period if a full year of payslips or a tax return is available. If you have recently changed employers or increased your shifts, the shorter verification window limits the amount of variable income the lender can recognise.

A midwife working at a new hospital for four months will have payslips covering that period but no annual average yet established. The lender uses the recent three-month average as the basis for variable income, then discounts it according to their policy. If that midwife had worked at the same hospital for 18 months, the lender calculates the average over the prior 12 months, smoothing out any one-off payment spikes and providing a more accurate picture of ongoing earning capacity.

Interest-only investment loans are assessed on the interest-only payment at the higher serviceability buffer rate, not the lower headline rate. This is the critical distinction that catches applicants who assume the lower repayment means higher borrowing capacity. The mortgage broker for nurses role includes running the calculation at the buffered rate before you make an offer, so you know your actual serviceability limit.

Shift Work and Serviceability Buffers

The serviceability buffer requires your income to support repayments at an interest rate at least 3.0 percentage points higher than the loan product rate. If you apply for an investment loan at a variable rate, the lender tests whether your income can service the loan if that rate increases by more than 3 percentage points from the day of approval.

In a scenario where a registered nurse applies for a loan amount that would result in monthly repayments of $3,200 at the product rate, the lender assesses whether that nurse's income can service monthly repayments of approximately $3,900 at the buffered rate. Shift income that is not fully recognised reduces the assessed income figure and therefore reduces the loan amount that passes the buffer test.

Shift workers in outer metropolitan suburbs can find stronger serviceability outcomes than those purchasing in premium precincts. A nurse buying an investment property in Blacktown at the suburb's current median for units will face lower repayments and pass the buffer test at a lower absolute income level than a nurse buying in Randwick. This is not a statement about investment merit, but it is the mechanical outcome of how serviceability works when shift income is discounted and loan amounts are higher.

Negative Gearing Rules and Investment Loan Applications

Losses from residential investment properties acquired after 7:30pm AEST on 12 May 2026 are deductible only against other income from residential properties from the 2027-28 income year, unless the property qualifies as an eligible new build. Properties under contract awaiting settlement at that time continue to allow losses to be deducted against all income, including salary and wages.

This change affects how you structure your investment loan application if you are purchasing an established property now. The interest on your loan remains deductible, but if your property runs at a loss, that loss can only offset other residential property income or be carried forward. Nurses and midwives who work overtime to cover the shortfall between rent and loan repayments will not receive a tax deduction against their shift income unless they also have capital gains or other residential property income in the same financial year.

First home buyer loans for nurses are not affected by these rules, as they relate to your principal place of residence. If you are considering purchasing an investment property before purchasing your own home, the sequencing of those purchases now carries different tax outcomes depending on whether you buy established or new.

Investment Loan Deposit and Equity Requirements

Most lenders require a minimum 10 per cent deposit for an investment property loan, with Lenders Mortgage Insurance applying to loans above 80 per cent LVR. Registered nurses and registered midwives may access LMI waivers at certain lenders, with maximum LVRs of 90 per cent, subject to minimum income thresholds of $90,000 per annum and maximum loan amounts that vary by lender.

If you already own your home and have built equity in that property, you can use that equity as your deposit for the investment loan. The lender assesses the equity release as a separate transaction and applies the same serviceability tests to the combined debt. Where multiple loans are secured over the same property in sequential ranking order with no intermediate interest from another lender, the loan amounts are aggregated and treated as a single exposure for the purpose of calculating the LVR. This means if you hold a $400,000 loan against a home valued at $800,000 and you want to borrow an additional $160,000 in equity for an investment deposit, the lender treats your total exposure as $560,000 against the $800,000 security, producing an LVR of 70 per cent on that property.

Income from your investment property is not included in your deposit calculation, but it is included in your ongoing serviceability once the loan settles. Lenders assess your ability to service both your home loan and your investment loan from day one, using the discounted rental income and the buffered interest rate on both loans.

Rental Income and the 80 Per Cent Rule

When you apply for an investment loan, the lender includes the expected rental income from the property as part of your total income. Lenders assess rental income at a discount, typically 80 per cent of the projected rent, to account for vacancy periods. This means if you are purchasing a unit in Parramatta that would rent for $680 per week, the lender includes $544 per week as assessable income.

The rental appraisal you provide with your application must come from a licensed real estate agent familiar with the local market. Lenders do not accept rental estimates from property spruikers, buyer's agents who are not licensed property managers, or online rent estimate tools. The appraisal must be specific to the property you are purchasing, dated within the last 90 days, and provided on the agent's letterhead.

If you already own an investment property and are applying to purchase a second, the lender uses the actual rent from your existing property rather than an appraisal. Where your existing property is currently vacant, the lender applies a higher discount or excludes that rental income altogether until you provide evidence of a signed lease.

Fixed Rate, Variable Rate, and Interest-Only Structures

Investment loans can be structured as variable rate, fixed rate, or split between the two. Variable rates allow you to make additional repayments without penalty and give you access to offset accounts that reduce the interest charged on the loan. Fixed rates lock in your repayment amount for a set term, usually between one and five years, but restrict additional repayments and do not allow offset.

Interest-only investment loans reduce your monthly repayment during the interest-only period by deferring principal repayments. The lower repayment does not increase your borrowing capacity under current serviceability rules, because lenders assess your ability to service the loan on a principal-and-interest basis at the buffered rate regardless of the repayment type you choose. A long-term interest-only residential loan is classified as non-standard where the LVR is greater than 80 per cent and the contractual interest-only period is greater than five years or is not specified.

If you hold an interest-only investment loan and your income includes a high proportion of shift allowances that are not fully recognised, you may face serviceability challenges when the interest-only period ends and the loan reverts to principal and interest. Planning that reversion at the time of application is part of the structure.

Debt-to-Income Limits for Investment Borrowers

From 1 February 2026, lenders may allocate up to 20 per cent of new investor loans to borrowers with a total debt-to-income ratio of six times or greater. The limits apply separately to the owner-occupier and investor lending portfolios of each institution and apply to new lending only. This means if your total debt, including your home loan and your proposed investment loan, exceeds six times your gross annual income, your application falls within the 20 per cent allocation cap.

A nurse earning $95,000 per year with an existing home loan of $420,000 and applying for an investment loan of $150,000 would have total debt of $570,000, producing a DTI ratio of exactly six times. That application sits at the threshold. If the same nurse were applying for a larger investment loan that pushed total debt to $650,000, the DTI ratio would be 6.8 times, and the application would sit within the capped allocation. Lenders prioritise applications with lower DTI ratios when managing their quarterly allocation, so borrowers close to or above the six-times threshold face longer processing times and higher declination rates.

If you are applying for your first investment property and you have an existing home loan, your DTI ratio is calculated using both debts together. Paying down your home loan before applying for the investment loan can bring your DTI ratio below six times and improve your approval likelihood.

Investment Property Finance for Nurses with Multiple Income Sources

Nurses and midwives working across multiple hospitals or combining public and private shifts must provide payslips from each employer. Lenders aggregate the income from all sources but apply their variable income discount separately to each employment stream. If you work two days per week at one hospital and three days at another, each employer issues separate payslips, and the lender requires at least three months of payslips from both.

Casual and agency nurses face stricter verification requirements. Lenders require at least 12 months of continuous employment in the same industry before they will assess casual income, and they typically discount that income by a further margin compared to permanent shift workers. If you have moved from permanent to casual employment within the last 12 months, most lenders will not include your casual income at all, regardless of how high your actual earnings are.

Agency nurses who have worked consistently for more than 12 months and can demonstrate regular shifts across the same client sites are assessed more favourably than agency nurses with sporadic or short-term placements. The lender reviews your payslips and any agency contracts to confirm that your work pattern is stable and ongoing. A letter from the agency confirming your ongoing engagement and typical weekly hours strengthens the application.

Call one of our team or book an appointment at a time that works for you. We assess your shift income, run your serviceability at the buffered rate, and structure your investment loan application so it reflects the full value of your nursing or midwifery income.

Frequently Asked Questions