Investment Property Mortgage Explained

The main criteria that make this type of mortgage different from your standard home loan mortgage, is that because it's for an investment property, the individual applying will not be living in the property. This is important as lenders deem this to constitute a greater risk when it comes to them lending. Simply because the individual is not at "risk" of losing where they live if repayments are not met. 

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The good news is that the interest rate an individual qualifies for is generally no different from an owner-occupied mortgage. The difference is the policies the lender has when it comes to the deposit. This is in normal circumstances 30% opposed to 20%.
 
Obviously the higher deposits required for these types of mortgages, creates a higher "barrier to entry". So some of the lenders allow in their policy to use as security the equity, if available in the individual's own home. This is possible because if repayments are not met on the Investment Property Mortgage, the individual would be also at risk in losing their own home also.