How Much Deposit Do You Need for an Investment Property?

Most registered nurses can purchase an investment property with a deposit between 10% and 20% of the property value.

The deposit amount depends on your loan to value ratio (LVR), whether you qualify for Lenders Mortgage Insurance (LMI) waivers available to nurses, and whether you're using equity from an existing property. A nurse earning $85,000 annually who wants to purchase a $500,000 investment property will face different deposit requirements than someone buying at $700,000, and understanding these differences determines how quickly you can build wealth through property.

The 20% Deposit Standard for Investment Properties

Most lenders require a 20% deposit for investment property loans, meaning you'll need $100,000 for a $500,000 property or $140,000 for a $700,000 purchase.

This threshold exists because lenders view investment property finance as higher risk than owner-occupied purchases. At 20% deposit, you avoid paying LMI entirely, which can save between $8,000 and $30,000 depending on your loan amount. A registered nurse purchasing a $550,000 unit in Brisbane with a $110,000 deposit (20%) would borrow $440,000 and pay no insurance premium, keeping more capital available for stamp duty and other upfront costs.

Your borrowing capacity on an investment loan also considers the rental income from the property, though lenders typically only count 80% of the expected rent to account for vacancy periods and maintenance costs.

Using Equity Instead of Cash Savings

You can use equity from your existing home as your investment property deposit without needing cash savings.

If you own a property worth $650,000 with a $350,000 mortgage, you have $300,000 in equity. Lenders will typically allow you to access up to 80% of your home's value, meaning you could leverage equity up to $520,000 total borrowing ($650,000 x 80%). Subtract your existing $350,000 mortgage, and you have $170,000 available equity to use as a deposit on an investment property.

Consider a nurse who purchased their home five years ago for $480,000, now valued at $620,000, with $320,000 remaining on the mortgage. They have $300,000 equity and can access $176,000 of it ($620,000 x 80% = $496,000 minus the $320,000 loan). This amount covers a 20% deposit on an $880,000 investment property, though they'll still need cash for stamp duty, which in Queensland would be approximately $33,000 on that purchase price.

The 10% Deposit Option With LMI Waivers for Nurses

Registered nurses can access investment loans with just 10% deposit through specific lender programs that waive or reduce LMI for medical professionals.

Standard borrowers purchasing an investment property with 10% deposit would pay LMI premiums between $15,000 and $45,000 depending on the loan amount. Nurses who qualify for LMI waivers can purchase with $50,000 down on a $500,000 property instead of the standard $100,000, and avoid the insurance premium entirely. Not all lenders offer this benefit for investment purchases, and eligibility typically requires permanent employment with a minimum income threshold around $90,000.

The approval process focuses heavily on your existing debts and living expenses when calculating serviceability at 90% LVR. A nurse with $600 in monthly car loan repayments and a $2,500 monthly owner-occupied mortgage will have less borrowing capacity than someone with the same income but lower debt commitments, even with the reduced deposit requirement.

Calculating How Much You Can Borrow With Rental Income

Lenders calculate your investment loan serviceability using only 80% of the expected rental income to account for vacancy rates and ongoing costs.

A property generating $550 weekly rent provides $2,383 monthly income, but lenders will only count $1,906 (80%) when assessing your ability to service the loan. If you're borrowing $450,000 at current variable rates on an interest only investment loan, your monthly repayment might be around $2,100. The rental income covers most but not all of this cost, and you'll need to demonstrate you can service the shortfall from your salary while maintaining your existing mortgage and living expenses.

Body corporate fees, council rates, and estimated maintenance costs also factor into serviceability calculations. A unit with $1,800 quarterly body corporate fees reduces your borrowing capacity more than a standalone house with comparable rent.

Interest Only Repayments and Deposit Strategy

Most property investors choose interest only repayments for the first five years to maximise tax deductions and maintain cash flow for portfolio growth.

This structure means your loan balance doesn't reduce during the interest only period, but your monthly repayments are lower than principal and interest loans. On a $400,000 investment loan, interest only repayments at a 6.5% variable rate would be approximately $2,167 monthly, while principal and interest repayments would be around $2,528. The $361 difference can be directed toward saving for your next deposit if you're expanding your property portfolio.

The deposit you provide upfront affects your interest rate, with lenders offering rate discounts at lower LVR levels. Borrowing at 70% LVR (30% deposit) typically receives better pricing than 80% LVR, though the difference might only be 0.10% to 0.20% on the variable interest rate.

Stamp Duty and Purchase Costs Beyond Your Deposit

Your cash requirement extends beyond just the deposit to include stamp duty, legal fees, and building inspection costs totalling 3% to 5% of the purchase price.

On a $600,000 investment property in New South Wales, stamp duty alone costs approximately $24,000, plus $2,000 for legal conveyancing and $600 for building and pest inspections. If you're using a 20% deposit ($120,000), your total upfront cash requirement reaches $146,600. Some nurses structure their equity release to cover both deposit and these additional costs, though this increases your overall borrowing and affects serviceability calculations.

Unlike owner-occupied purchases, investment properties don't qualify for first home buyer stamp duty concessions or exemptions, regardless of whether it's your first property purchase overall.

Call one of our team or book an appointment at a time that works for you. We'll review your specific situation, calculate your borrowing capacity with rental income included, and identify which lenders offer the strongest rates and LMI benefits for nurses purchasing investment property.

Frequently Asked Questions