Finance

How Much Deposit Do I Need For An Investment Property?

We get that buying an investment property can be exciting – it’s a whole different process to buying somewhere to live and your mindset is completely different – but it still raises a few practical questions. 

In Australia, lenders generally expect a larger deposit on an investment home loan than on an owner-occupied loan. Typically, you’ll need around 20% of the purchase price as a deposit (an 80% loan-to-value ratio) if you want to avoid paying lenders mortgage insurance (LMI), which we’d definitely recommend you aim to do. 

Some lenders will accept smaller deposits if you pay for the insurance. For example, some offer loans with as little as 10% deposit – but you must pay LMI. LMI is essentially insurance for the bank if you default.

How Much Can I Borrow?

So one of the main things that affects your borrowing power is your deposit size. This, alongside your income and whatever equity you already have. In practice, a larger deposit generally means a larger loan amount. Just make sure your first step here is reviewing your finances and working out how much you can borrow and afford.

Getting Pre-Approval

After this, get a home loan pre-approval so you can effectively ‘lock in’ your budget. A pre-approval essentially gives you provisional credit approval and shows sellers that you actually have a budget and are serious. 

Since mid-2024, lenders have been a bit stricter on serviceability. And as a borrower, you’ll likely find that you qualify for smaller loan amounts than in earlier years. So it generally pays to be conservative: always ask yourself “how much can I borrow for investment property” in realistic terms. 

As a rule of thumb, the maximum loan amount is roughly the purchase price minus your deposit, but it’s subject to your ability to service the loan. Use online borrowing-power calculators (you can find one at Upscore) or a broker’s help so you know you’re not overstretching.

Loan Types and Repayments

Next, consider your loan structure. You can choose fixed or variable rates, and principal-and-interest (P&I) or interest-only repayment options.

Interest-only loans keep your monthly repayments lower at first, so this helps your short-term cash flow when the property is finally rented. That said, interest-only comes with a longer-term cost: you pay no principal for a time, so you end up paying more interest overall.

Comparing Loan Rates

In fact, over the life of an interest-only loan you’ll usually end up paying more interest than with a standard loan. APRA data shows interest-only loans were about 21.0% of new housing lending in mid-2024. 

And keep in mind that interest-only loans often carry higher interest rates than P&I loans, which just means a higher ongoing cost. If you choose interest-only, definitely plan for a jump in repayments later when the interest-only period ends. 

So, how do P&I loans compare? These have higher repayments from day one but pay off the balance a lot more gradually. That said, there’s not really one ‘best choice’ here – it depends on your goals: interest-only can maximise cash flow now, while P&I is better if you plan to pay off the loan faster. 

As always, read all loan terms and conditions carefully to understand rates, fees and limits before signing.

Cash Flow vs. Growth

So, after you’ve got a better idea of what loan type suits your needs the most, you’ve got to start thinking about your broader investment strategy. 

Are you after steady cash flow or long-term capital growth? It’s not exactly uncommon for investors to aim for both, but one of those often takes priority over the other. 

If cash flow is key, look for areas that have strong rental demand and decent yields. If growth is the goal, you might want to accept lower initial rent in exchange for a suburb that’s on the rise. 

Generally speaking Australian gross rental yields are moving all the time, so it’s to give you an exact figure of what to expect. That said, inner-city yields (e.g. Sydney, Melbourne) tend to be lower. 

That might sound a bit counter-intuitive, but because the property’s market value in these cities are disproportionately high compared to the rental income it can generate, the yield is actually a bit lower if you’re focused on short-term gains.

Always calculate whether expected rental income will cover your loan repayments and costs. If rental income is lower than your expenses, you’ll have negative cash flow (and rely on the tax offset we described).

Negative Gearing Benefits

Remember tax rules: in Australia you can generally deduct most property expenses (especially loan interest) against your taxable income. This means if your rent doesn’t cover your costs, that loss (a negatively geared situation) can often be used to reduce your tax, which is not a bad situation to be in. 

Negative gearing can therefore offset some of your shortfalls while you wait for capital growth. It’s actually pretty common for investors to accept short-term losses since they know they will get tax deductions and hopefully capital gains later.

Choosing the Property

Location and property type affect both deposit size and returns. For example, Sydney’s median house price is about $2.05M (mid-2025), so a 20% deposit would be over $400k. 

Brisbane’s median is around the $960k mark, so the deposit needed is much smaller. Also consider rental yield: inner-city apartments often yield under 4%, while houses in popular suburbs or smaller capitals tend to yield around 5% or more. 

So just decide whether you want to prioritise capital growth (often higher in major-city suburbs) or rental yield (sometimes higher in regional or emerging areas).

Tenant Perspective

Think like you’re the tenant who’s going to be living here: amenities matter. This means you need easy access to:

• Public transport
• Schools
• Shops

Brokers even suggest writing down what tenants want – “good schools nearby, parking spots and noise levels” are commonly cited factors. Take these into account as they’re almost always going to improve your rental income and reduce your risk of vacancies.

Upfront Costs

And don’t forget the other costs beyond the deposit:

• Stamp duty
• Legal and lender fees
• Building inspections
• Any initial repairs or renovations 

These all have to be budgeted for. If your deposit is under 20%, add the LMI premium to your budget as well. For example, stamp duty on an $800k property can exceed $30,000, so these costs really matter. Altogether, these expenses can add tens of thousands to the total.

Final Steps and Credit Readiness

Before you make an offer, get organised. Secure formal pre-approval so you know exactly how much you can borrow. Lenders will then scrutinise your entire financial situation, which includes:

• Income
• Debts
• Expenses
• Credit score

That’s why you should address any credit issues and assemble all your paperwork in advance. Also, read every loan’s fine print. Know whether the loan is fixed or variable or how interest is calculated (including what fees or limits might apply.

Finally, consider getting professional help. A mortgage broker who specialises in property investing can explain which lenders have flexible rules (for example on LVR or interest-only) and help structure your loan to fit your strategy.

How Upscore Can Help

Looking to make the lending process as streamlined as possible? Upscore’s Finance Passport is free to try, so signing up early can give you insights into your credit standing before you apply.

Get started today!

How Do Credit Scores in Spain Work?

Just as anywhere else in the world, you’re not going to be able to secure the loans necessary for purchasing a property in Spain if you have a poor credit score. But how exactly does that system work in Spain? Is it basically just the same as back here in Australia?

Overview

The truth is, Spain doesn’t really use a FICO-style credit score like in Australia, the US or the United Kingdom. Instead, Spanish banks take a look at your credit information by checking databases of loans and any missed payments. 

So there’s not exactly one single “credit score” number like there is in those aforementioned countries that use a more familiar number system. In fact, the Banco de España runs the Central Credit Register (CIRBE), which logs virtually all loans, credits, guarantees and other debts over certain thresholds. 

Any person (including you) can request a CIRBE report for free so you can see what’s recorded about your debts. In Spain, banks mainly use these records (especially any negatives) to make decisions – they don’t pull a credit score from a bureau and boost you based on past payments, the way they might back home.

The Central Credit Register (CIRBE)

So to reiterate, Spanish lenders won’t pull a single credit number on you like Aussie banks do. Instead, they consult Spain’s credit registries. 

For example, the CIRBE collects details of anyone’s outstanding loans above about €6,000, regardless of whether you’re up-to-date on payments. It’s not a debtors’ blacklist: even borrowers who pay on time show up with their total “risk”. 

In contrast, separate files run by ASNEF (managed by Equifax) and BADEXCUG (by Experian) only list defaults and late payments.

So to put all that simply, Spanish banks basically scrutinise any negative entries on your record – multiple late payments could get a loan refused or delayed (they can stick around for up to six years) – rather than rewarding you for the good stuff.

Negative Reporting and Credit Bureaus

Lenders in Spain focus on your overall profile, such as your income and whether you’ve met past obligations. If your pay is high and you have a tidy bank history, that matters more than any foreign score. 

In practice, that means simply keeping up with payments – your payment history – is key. Having a “good credit score” back home won’t hurt, but definitely don’t expect it to just magically lower your mortgage rate in Spain. 

Instead, things like job stability, a large down payment and clean bank account statements have the most influence on the type of interest rates you’ll be offered. To give you a general idea, typical Spanish mortgage interest rates hover around 2-4% these days. Again, it generally depends mostly on economic factors and loan terms, not a borrower’s credit number.

How Is Spain Different?

So, does Spain have credit scores at all? Simply put, Spanish lenders don’t use credit scores to approve loans. There’s no system where you can earn points for on-time payments and then show a number to a bank. 

You’ve probably seen credit scoring systems like this in the United Kingdom or the US – those countries rely on models where higher is better. Spain’s approach is more focused on something called negative reporting. Only your slips (like unpaid debt or declared overdrafts) get noted in the system. 

The CIR simply records loans and any defaults, without assigning any credit score. That means banks don’t pull out a number and say you’ve “built credit” so much. Instead, good credit here basically means no bad credit events. That should be your main takeaway from all this. If you have no defaults or late payments logged, Spanish lenders will take that as evidence of being reliable.

Comparing International Credit Systems

We get that this whole concept of not having a literal credit score number can be a bit jarring if you’re used to that system in Australia, but not every country has credit scores. Some countries do have credit scoring systems (Canada, the United Kingdom, the US, etc.) while others – including Spain and the Netherlands – rely on negative credit reporting. 

The credit score in Spain is essentially non-existent from the borrower’s viewpoint. Spanish banks simply check registers. Even in the UK, there’s no single global number: the UK has three major credit bureaus (Equifax, Experian and TransUnion) and each of them has its own scoring system. 

If you’re an Australian, you’re undoubtedly going to recognise Equifax and Experian – in Spain, those names appear only behind the scenes. The consumer registers are ASNEF (which is run by Equifax) and BADEXCUG (run by Experian). These function a bit like credit reference agencies, but again they only report on trouble – they don’t certify good behaviour or compute a “higher score” if you’re frugal. And no, this is not anything like a social credit system; it’s simply about your borrowed money.

Building a Credit Profile in Spain

So what does this mean in practice? If you move to Spain, think of “building credit” as simply proving you meet your obligations. As mentioned, you’re not going to get a pat on the back for simply paying your bills on time – you just need to not be late and unreliable, and you’ll get the right loan.

It helps to open a Spanish bank account early (many landlords and utilities require it) and, if possible, get something like a modest credit card or small loan and pay it off immediately. That way the registry will see you have no unpaid balances. 

Keep your bills automated and on time. Aussie borrowers often worry about credit cards – without a local history, you might not even qualify for the same cards you have in Australia. 

However, Spanish banks sometimes offer basic or secured credit cards once you have an account and some income. Use those responsibly. The main idea you need to get behind here is to not get on any blacklist. In effect, you’re doing the opposite of aggressive credit usage (so your credit utilisation goes low by default because you have little in the way of drawn credit). 

This matches the usual advice from scoring systems worldwide (pay on time, keep balances low), even though Spain doesn’t tally those factors itself.

Interest Rates and Loan Approval

Above all, remember there’s no shortcut like a single “credit score” you can boost. Spanish lenders just want assurance you won’t default on their loan. They’ll ask for:

• Pay slips
• Savings statements
• Tax returns
• Proof of assets

Having more money to put down or a jointly signed mortgage (say with a partner or Spanish co-borrower) often matters more than any credit history. 

In terms of getting good interest rates, a solid work contract or owning property already can yield the best rates, rather than a borrowed credit score. 

Essentially, higher scores help in scoring countries, but in Spain the “score” is simply having no negatives and plenty of stability.

How Upscore Can Help

If you still have questions or want tools to help build credit across borders, check out Upscore’s Finance Passport –  it helps bridge the gap between your Australian credit record and lenders in Spain!

Get your Upscore Finance Passport today!

How Do Credit Scores in Italy Work?

Does Italy have credit scores? We get this question quite a lot but the short answer is always “not in the Aussie sense.” In Australia, we’re used to a numeric credit score from bureaus like Equifax or Illion. In Italy, creditworthiness isn’t summed up by a single number. Instead, the Bank of Italy runs a Central Credit Register (Centrale dei Rischi) that collects detailed information on loans and debts. 

This means if you search for “credit score in Italy” or “credit score Italy”, it won’t turn up a familiar range of points. Italian banks focus on your credit history and overall financial situation, not a three-digit score. 

Needless to say, this feels odd when we’re all so used to thinking in terms of “good credit” or a FICO-like number, but their system still serves a similar purpose: lenders must see if you can pay back what you borrow.

Overview

Italian banks and lenders submit all the loans and guarantees to the Central Credit Register. The Banca d’Italia even says this CR is “a database on household and firms’ debts towards the banking and financial system.” 

It’s fed by data from participating:

• Banks
• Financial companies 
• Other lenders

In practice, every mortgage or line of credit above a certain size will show up in your record. For any big debts (over about €30,000), every payment and even late payment is reported. So to put this simply, your credit information – not scored in points like it is here, but recorded – is centralised at the Bank of Italy. 

And if you have a solid record of on-time repayments, you build a good credit history in Italy; if you default or have missed payments, that also goes in the file.

From here, it’s fairly similar to how it is in any other country: Italian banks then read this register when considering a loan. They don’t pull out a credit score number; they see a history of your debts and payments. In effect, having good credit in Italy means having a clean, up-to-date CR file. 

Again, just like it is in Australia, people with good standing – meaning no missed loan payments – are generally going to find it easier to borrow and get better terms.

Checking Your Credit Report

So, can Australians view their Italian credit report if they’re looking to get a loan or mortgage here? Yes. If you plan on living or intend to borrow in Italy, you can request your CR data from Banca d’Italia. By law, the Bank of Italy must give you the information it has. 

How to Access This Information

You can apply for your Italian “credit report” (CR data) online or by mail, and it’s completely free. For example, the Bank of Italy site notes: “Access to Banca d’Italia’s Central Credit Register (CR) data is free of charge”. 

Within about 30 days or possibly a bit less, they’ll send you a report of what’s recorded under your name. This Italian credit report will list your:

• Loans
• Balances
• Any overdue amounts on file

Again, keep in mind that it isn’t going to give you a fancy score, but it shows your registered debts and indicates if you’ve ever been flagged as a problem borrower.

Interpreting Your Data

Reading your Italian credit report is fairly necessary as it’s your best way of confirming what the lenders see. If you spot an error (for example, a loan that’s been paid off), you need to get in touch with Banca d’Italia or the bank that reported it. 

And keep in mind that Italy has a few private credit information systems (SICs) like CRIF or Experian, but those are voluntary networks and separate from the official register. Most banks in Italy rely first on the Bank of Italy’s register.

How Behaviour Affects Credit in Italy

What actions build or hurt your credit when you’re in Italy? Much as in Australia, paying on time is always one of the most important parts. 

If you pay off loans and credit cards as quickly as you’re able to, your CR shows positive behaviour. Even single late payments don’t automatically label you a “bad debtor” until a lender decides there’s serious trouble. 

Banks actually evaluate your overall financial situation. This means they look at income, existing debts and repayment history together. For example, a lender will consider your debt-to-income ratio (the debt payments you have vs your salary) and past loan performance. The Bank of Italy explains that a customer is marked as bad only after an intermediary has assessed the customer’s entire financial situation – not just one missed bill. 

So this basically means that if you run up credit card balances (which Italians often call “revolving credit”), how you service those balances matters. For example, if you’re carrying large credit card debt or have a bunch of loans with late payments it’ll show up as higher indebtedness in your CR file. That would mean you’d struggle getting other loans in the future.

Likewise, taking out loans can help build history. Even though Italy doesn’t have a credit-score number, you’re naturally still going to be rewarded when you borrow and repay the lender promptly. 

The CR is basically supposed to “improve the assessment process for creditworthiness” by giving a full credit history. In other words, a history of loans that have gone well helps. So if you use credit cards or instalment loans, make sure to pay them off on schedule. 

Being New to Italy and Building Credit History

The whole system of needing good credit history to get a loan is obviously going to be hard for newcomers as you won’t have any local credit history yet. When you apply for credit or a mortgage, Italian lenders will see no entries in the CR under your name. 

That’s not the same as bad credit – it just means “unknown.” In practice, banks deal with this by looking harder at other signals, such as:

• Large deposits
• Strong income
• International credit proofs

You might be required to provide extra documentation (like your Australian credit report, income letters, foreign property ownership, etc.) or pay even more down payment.

It’s also common to see stricter debt-to-income limits (often mortgage payments capped somewhere around 30-35% of your net income). Because of this, many foreign buyers find it takes quite a while for them to qualify for all the best mortgage rates. 

It’s not exactly a quick solution, but one way you can help get to that stage is to simply be a bit more patient. That’s as simple as paying any Italian bills (like your rent or utilities) on time to slowly build a domestic track record. And make sure you start with smaller credit lines (for example, a secured card or a modest personal loan) before going for a big mortgage. 

Over time, those entries in the CR will form your Italian credit history. Meanwhile, showing a record of good credit behaviour back home in Australia (like on-time home loan or credit card payments) can help convince banks to approve your loan here. 

How Upscore Can Help

Upscore’s Finance Passport can be massively helpful for securing mortgages overseas. This platform lets you package your Aussie financial history – income, liabilities, credit accounts, and repayment history – into a format Italian banks can review.

Get started now!

Refinance Home Loan – All You Need to Know

Both property investors and regular people who live in their homes refinance their home loans so they’re able to have a better mortgage situation. We get that it’s one of those things that can sound a bit complicated, though. 

A refinance home loan is essentially just a new loan that replaces your existing mortgage. You could opt for a home refinance if you’re looking for a lower interest rate, or even just to access equity for other purposes. It could even be a matter of just wanting a loan with generally better features. 

Throughout this article, we’ll break down:

• What refinancing is
• Why you might consider it
• How switching home loans works
• Key terms you should know about

What Is a Refinance Home Loan?

For anyone wondering what is refinance home loan exactly, it’s basically just when you take out a new loan so you can pay off your current mortgage. The main idea here is that your new one will have a lower rate or more suitable terms. 

Some people call it a home refinance or simply just refinance house, but the general principle is the same: you’re getting a new deal on your mortgage to hopefully save money or better suit your needs. The new loan pays out the old loan, and you then make future repayments to the new lender.

How Home Equity Works

One of the main parts of refinancing is the equity in your home. Equity is the part of your property that you own outright – basically the difference between your home’s market value and the remaining loan balance. 

For example, if your home is worth $700,000 and your mortgage balance is $400,000, you have $300,000 in equity. Most lenders want you to have at least 20% equity (meaning your loan to value ratio is 80% or less) to approve a refinance, unless you’re willing to pay lender’s mortgage insurance (LMI). This is just another cost you’re better off avoiding if possible. 

Your loan-to-value ratio, or LVR, is simply the ratio of your loan amount to the property value. More equity means a lower (and safer) LVR, which not only avoids LMI but can even help you get a better rate. Lenders pay close attention to LVR, as this ratio LVR is a key factor in assessing your loan application.

Refinancing also lets you reconsider your loan type and features. You might switch from a variable interest rate loan to a fixed rate home loan so you’ve got a bit more certainty in your repayments (fixed rate home loans lock in your interest rate for a set period). 

Or you might go the opposite way to get more flexibility. If you currently have a fixed rate period ending soon, it’s fairly common to start looking around – most people refinance when a fixed term is about to revert back to a higher variable rate.

Why Refinance Your Mortgage?

Not sure why to refinance your mortgage? See a few of the main benefits below:

Lower Interest Rate and Repayments

The most popular reason to refinance is so that you can get a lower rate. A reduced interest rate can mean smaller monthly repayments and significant savings over the life of the loan. 

Cash-Back Offers

Some lenders offer a refinance home loan cash back promotion – essentially a cash bonus when you bring your mortgage over to them These deals might give you a few thousand dollars upfront. Be sure the new loan’s interest rate and fees are competitive, so that the cash back is actually a true gain and not just wiped out by a higher rate.

Access Your Home Equity

If you have built up equity, refinancing lets you tap into it. For instance, you might increase your loan amount to:

• Fund a renovation
• Buy another property
• Or even consolidate other debts

You’re “cashing out” some equity while refinancing – putting your home’s value to work for you.

Better Loan Products or Features

You might also refinance to get loan features that you don’t have with your current mortgage. For example, you could choose a new loan product that offers an offset transaction account (which helps reduce interest costs), or switch the type of loan – like from an interest-only loan to a principal-and-interest loan – to better suit your financial goals.

You might wonder, is it good to refinance your home every time? Not necessarily. If you’re already on a great rate and plan to sell soon (or would have high costs like break fees or LMI on a high LVR ratio), it might not save you money. Always weigh the costs vs savings – if the new deal doesn’t clearly put you ahead, staying with your current lender could be the smarter move.

Switching Home Loans: The Refinancing Process

Refinancing isn’t something you’ll just do on a whim since it requires a bit of planning. That said, it’s not that difficult – here’s an overview of how refinancing a home loan works in Australia:

1. Review Your Current Loan and Goals

Start by checking your:

• Current interest rate
• Loan balance
• Features
• Possible exit fees

Then just think what it is you want from a new loan – maybe a lower rate or just specific features that your current loan doesn’t have.

2. Compare Loan Options

Shop around (or consult a mortgage broker) to find a good deal. Compare interest rates, fees (like application or ongoing fees), and features across various loan products. If your existing lender is willing to negotiate, compare their retention loan offer to other lenders’ offers.

3. Check Your Eligibility

Make sure you meet the new lender’s requirements. They will assess factors like your income and credit score, just like when you first got your mortgage. You’ll generally need a solid credit history and ideally at least 20% equity (an LVR of 80% or less) for the smoothest approval. The lender may arrange a fresh valuation of your property during this step.

4. Apply for the New Loan

Once you’ve chosen a lender and loan product, submit your refinance application. You’ll need to provide documentation:

• Payslips
• Bank statements
• ID
• Details of your current loan

After the application, the new lender will process it and (if all looks good) approve your loan – often giving a conditional approval first, then final approval. You’ll then receive a formal contract or loan offer to sign.

5. Settlement (Loan Switch) Day

After you sign the paperwork, the new lender works with your old lender to settle the refinance. On the settlement day, the new loan funds are used to pay off your old mortgage, closing it out, and your loan officially transfers to the new lender. 

You’ll now make repayments to the new bank moving forward. The whole refinancing process usually takes a few weeks – often around 4-8 weeks (about 60 days) from application to settlement. Once settlement is complete, update your payments to the new lender – then enjoy your new loan’s benefits!

How Upscore Can Help

Ready to get started? Sign up for Upscore’s Finance Passport to simplify the refinance process and compare home loan offers from multiple lenders today. It’s free and could save you time and money.

Get your Upscore Finance Passport today!

Mortgage Broker vs Bank Manager – Which Is Best for You?

Mortgage broker vs bank for home loan – which option is best? Both have pretty similar roles so we’re definitely not surprised by how common a question this is by most Australians, from first home buyers to property investors.

On one hand, working with a mortgage broker can generally just be quite convenient. Not to mention that it gives you the ability to compare loans from multiple lenders. On the other hand, walking into your local bank feels straightforward and familiar. You might not have that feeling like someone’s trying to make money out of you, either. So, how do you choose the right path for your financial situation?

Generally speaking, there’s not actually a one-size-fits-all answer here because both options have their pros and cons when it comes to factors like:

• Interest rates
• Loan choices
• Support
• Overall experience

Throughout this guide, we’ll look at the key differences – from rates and fees to the range of home loan products and long-term support – so any potential home buyers out there reading this can decide what’s best for them.

Working with a Mortgage Broker

A mortgage broker is like a home loan matchmaker. When you’re working with a mortgage broker, they do the legwork to find loan options from multiple lenders that suit your needs. Instead of being limited to one bank’s offerings, you get access to a variety of home loan products across different financial institutions. That’s the main takeaway. 

A good mortgage broker will understand your goals and overall financial situation, then use their network to find a deal that fits. The best part here is that brokers are typically free for you – they get paid by the lender, not by charging fees to you. In other words, you usually won’t pay any out-of-pocket broker fees for their service. 

So really, it’s no wonder nearly three-quarters of new home loans in Australia are arranged through brokers – many Aussies like the choice and convenience brokers give you.

Other Advantages

And on that whole scamming issue, brokers in Australia are actually legally required to act in your best interest. This means they must prioritise finding you the best home loan deal for your needs. 

This duty sets them apart from a bank lender, who isn’t held to the same standard. Keep in mind, though, brokers work with a panel of lenders – a wide selection, but not every lender in the market. And while it’s rare, an unethical broker might favour one lender that pays them more commission. However, the Best Interests Duty now in place is designed to prevent that by legally obligating brokers to put your needs first.

Simplicity

Using a broker can also make applying for a home loan much easier. They:

• Help gather your documents
• Fill out forms
• Handle the back-and-forth with lenders

If you’re a first home buyer feeling overwhelmed, a broker will walk you through each step in plain English. And if you’re an investor, a broker can save you heaps of time – many property investors rely on brokers to compare loan options and juggle multiple lenders for them.

Extra Support

Another big plus is the ongoing support. A broker’s job isn’t over once your loan settles. Down the track, they can check your loan and make sure your rate stays competitive. In fact, brokers often help you refinance or switch loans later if it benefits you. 

It’s a long-term relationship, not just a one-off transaction. Of course, choosing a mortgage broker you trust is key – you want someone in your corner for the long haul.

Working with a Bank Lender

Going directly to a bank is the traditional way to get a home loan. The one you probably have in your mind as the default option. If you walk into your bank to apply, you’ll deal with a bank lender (basically a loans officer or bank manager). 

This means working with one financial institution and its own suite of home loan products. The bank can’t offer you loans from other lenders – only what they sell in-house. So you won’t get the same breadth of choice you’d have with a broker. 

However, many people still like going to their bank. Maybe you’ve been with them for years and feel comfortable there. The familiarity can make the process feel simpler since the bank already has your details on file.

Other Advantages

Sticking with your bank can have other perks, too. It’s convenient to keep all your finances in one place – your savings, accounts, credit cards, and mortgage under one roof.

Banks also sometimes reward loyalty with perks like interest rate discounts or fee waivers on bundled products. And if you find a great deal elsewhere, your bank might even match it if you ask. There’s no harm in saying to them that you found a lower rate and asking if they could beat it. Often they’ll try, especially if you’re a valued long-term customer.

On the flip side, going direct means comparing loan offers falls on you. Your bank isn’t going to tell you if a competitor has a better deal. So if you stick with one bank, you’ll need to shop around yourself to make sure you’re not missing out. That can be time-consuming – you might have to contact multiple banks and collect loads of different quotes.

Also, bank staff don’t charge you to discuss a loan – the bank earns money from the loan’s interest rate and fees once you sign up. 

So in short, there’s usually no real difference when it comes to mortgage broker fees vs bank costs; you typically won’t pay any extra for the loan by using a broker instead of going direct. The two paths mainly differ in how many options you can see and who does the legwork.

Mortgage Broker vs Bank Manager – Which Is Best for You?

So how do you decide between the two? Think about what matters most to you: Do you want plenty of options and a guide to help you compare them, or do you prefer the simplicity of dealing with a bank you already know and trust? 

If you’re a first home buyer who needs extra guidance, a broker might be your best bet. But if you’re confident in your bank and like the idea of a one-on-one with a familiar bank manager, you may lean toward the bank.

For an investor with long term plans to build a property portfolio, a broker’s ability to tap multiple lenders can be a big advantage. On the other hand, if you already have a specific loan in mind from a particular bank, going direct might feel more straightforward.

You can even talk to both a broker and your bank and compare – there’s no rule against getting information from both. Ultimately, brokers vs banks each have their place. The “best” choice is whatever makes you feel most confident and gets you a good deal. That could be from the personalised touch and broad comparison a broker gives you, or the simplicity of dealing with your bank, it’s about what works for you.

How Upscore Can Help

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What Is a First Home Buyer Loan?

How Much Can I Borrow for Investment Property?

Thinking of buying property in Sydney or a holiday home abroad but don’t know how much you can actually borrow? Your borrowing capacity – essentially the amount a lender might lend you – is made up of a mix of factors. 

Lenders assess your whole financial picture, which includes:

• Your income
• Existing debts
• Any expected rental income
• Your deposit size (which affects the loan-to-value ratio, or LVR)

You’ll have a much clearer idea of what a bank is realistically going to offer you if you know how these pieces overlap. While the same basic principles apply for a property in Australia as they would overseas, buying internationally can introduce a few extra considerations (which we’ll touch on below).

Income and Ongoing Commitments

Income is naturally one of the main things that make up your borrowing power. Australian lenders are going to look over your salary and other earnings (like overtime or bonuses) to gauge how much money you actually have coming in. 

So generally, the steadier and more regular your income, the more comfortable the bank is going to be with lending you money. If you’re self-employed or juggling multiple jobs, they might look a bit closer or use an average, but they will definitely still count various income streams in your favour.

Outgoing Expenses

They also check what you’re already paying out each month. All existing loans and other debts you’ve got are going to chip away at the portion of your income you could be using for a new mortgage. For example, even if you pay off your credit card every month, the card’s limit (say $10,000) is treated as potential debt – the bank is going to factor in a monthly repayment on that limit when calculating your expenses. 

But then you’ve got everyday living costs that they factor in on top of your debts – everything from groceries to utilities – and even how many dependents you support. The more expenses and obligations you have, the less wiggle room in your budget for additional loan repayments. 

So to put all this simply, every dollar you’ve already got committed somewhere else is a dollar less available for a new property loan, which is why paying down debt can boost your borrowing capacity (it frees up cash flow that lenders can then take advantage of for your next loan). 

And remember, borrowing power is not identical across all banks – each lender has its own formula and criteria, so your maximum loan can differ significantly from one to another.

Rental Income from the Investment

Naturally, one of the main perks of an investment property is that it can produce rental income – and lenders will include that in your assessable income (but not at 100%).

As a general rule, about 75-80% of the gross rent is counted. So if you plan to charge $500 a week in rent, the bank might only factor in roughly $400 of it for your borrowing capacity. The rest is left out as a buffer for things like agent fees or periods when the property might be vacant, which is obviously still a possibility.

Rental income does improve your borrowing power, just not dollar-for-dollar. And if you already own other investment properties, their rental income (minus that same buffer) and their loan repayments will also be considered. 

In short, lenders add up all your income sources – including rent – and weigh them against your outgoings to decide what you can comfortably afford to borrow.

Deposit Size and Loan-to-Value Ratio (LVR)

How much you can borrow also hinges on your deposit. If you’re reading this article from an investor’s perspective, remember that you will generally need at least a 10% deposit for a home loan. The bigger your deposit, the lower your loan-to-value ratio. And the more comfortable lenders will be. 

If you have less than 20%, it’s often still doable, but you are probably going to have to pay Lender’s Mortgage Insurance (LMI). LMI is a one-off insurance fee that covers the lender if you default, and it usually applies when you borrow more than 80% of the property’s value. Staying at or below an 80% LVR (i.e. 20% deposit or more) lets you avoid that extra cost and can make your loan application stronger. 

For example, on a $500,000 purchase, a 10% deposit (around $50,000) might come with a hefty additional LMI premium, whereas a 20% deposit ($100,000) avoids LMI entirely and puts you in a stronger position with the lender.

Your deposit can come from savings or even equity in an existing property. You’ll see loads of investors using equity from their current home as the deposit for their next purchase. It’s essentially borrowing against the home they already own to help buy the new property. 

This can be a smart way to get into another investment sooner, but remember it effectively increases the loans you have (your first home loan grows), which the bank will factor into your overall borrowing capacity.

Local Investments vs Overseas Properties

If you plan on investing abroad, the lending game changes a bit. Australian banks usually won’t accept an overseas property as collateral because they cannot easily manage a foreign asset if you somehow default. You could, however, use any of the property you own here to finance a purchase over there as a bit of a workaround.

For example, you might refinance or get a home equity loan on your Australian house, then use those funds to buy the overseas property. If you do this, your borrowing capacity is still determined by your Aussie financials, since it’s your local property and income securing the debt.

Overseas Properties

Alternatively, you might seek a mortgage from a lender in the country where you’re buying, or use an international bank that caters to cross-border buyers. Some global banks (like HSBC) operate in multiple countries and may lend to Australians for overseas purchases. 

These foreign loans will still examine your income and debts, much like an Australian loan, but just keep in mind that you might face different terms. Often non-resident buyers need a larger deposit when buying abroad (sometimes more than 20%), and local rules can affect how much you can borrow. 

No matter where you buy, you’ll need to show that you can comfortably service the loan with your income and assets. The reality is that it’s going to take a bit more effort to finance an overseas property, but plenty of Australians do it successfully with the right planning and lender support.

How Upscore Can Help

Upscore’s Finance Passport lets you get in contact with local lenders when you’re buying property overseas. You’ll also be able to compare different loan offers and don’t have to pay a thing – we earn our fees from lenders, so it’s at no cost to you.

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What Is a GSA Agreement?

You’ve probably seen the term GSA somewhere in the fine print if you’ve ever applied for a business loan in Australia. It stands for General Security Agreement. That sounds a bit dry and like vague legal jargon, but it’s actually a key part of many loan deals. In short, a GSA is an agreement that gives a lender rights over your assets as collateral for a loan. 

Don’t go into one of these agreements without properly knowing what a GSA is. They’re generally pretty useful tools for borrowing money personally or for your business, but you might get a nasty surprise down the line if you don’t know how it works beforehand. 

In everyday terms, a GSA is like a safety net for lenders – it gives them a claim over your assets if you fail to repay the loan. This concept pops up in both personal finance and business lending. 

Let’s explore:

• What it actually means
• How it works in practice
• Where you might run into a GSA in Australia

What Exactly Is a General Security Agreement?

A General Security Agreement is essentially a legal contract between a borrower and a lender that creates a security interest in all the borrower’s present and future assets. In other words, it’s a “blanket” charge over nearly everything you own (apart from land or buildings) to secure the loan. 

The lender isn’t picky about one particular item as collateral – they want the whole collection of your assets as a fallback. This type of all-assets security was known as a fixed and floating charge before the Personal Property Securities Act 2009 came into effect, but nowadays we just call it a GSA.

It’s also worth noting here that a GSA typically does not cover any real estate you own (your house or land aren’t included). Real property is dealt with separately through things like mortgages or caveats. Instead, a GSA covers personal property – things like:

• Cash in your accounts
• Stock or inventory
• Vehicles
• Machinery
• Even intangible assets like accounts receivable or intellectual property

So you’re essentially granting the lender a legal right to those assets as collateral by signing a GSA. This might sound like you’re putting a lot on the line, but it’s actually a very common arrangement in commercial finance because it gives lenders confidence they can recover their money if things go wrong. 

Basically, the GSA makes the loan secured against your pool of assets, not just a single item.

How Does a GSA Work?

When you agree to a GSA, you’ll sign a document (often as part of the loan contract) that spells out all the terms for you. Both you (the borrower) and the lender sign it, and then the lender will usually register the GSA on the government’s Personal Property Securities Register (PPSR). 

Registering on the PPSR is important in Australia because it publicly records the lender’s security interest and shows that they’ve got a priority claim on those assets. If you try to offer the same assets to another lender as security, a quick PPSR search would show them the existing GSA you’ve got with another lender, so that’s how they prevent conflicting claims.

Once the GSA is in place, it just sits there while you continue business as usual. You still own and use your assets, but there’s a caveat that the lender has first rights to them if you don’t meet your obligations. 

From the lender’s perspective, it’s an easy maintenance arrangement: they don’t need to itemise every asset or update the list whenever you get new equipment or stock – the GSA automatically covers everything. 

In contrast, a Specific Security Agreement might tie the loan to one particular asset (which could be a particular vehicle, for example), but a general security agreement casts a wide net over all your assets, which is a lot simpler for the lender to manage.

Defaulting on Your Loan

So what happens if things go wrong? If you keep up with your repayments, nothing really changes – the GSA is just a safety measure in the background. But if you default on the loan (meaning you fail to pay as agreed), the lender has the right to step in and recover the debt from your assets. 

The GSA document will outline the steps the lender can take in a default scenario. This means the lender can seize and sell your assets to get their money back. For example, if your business can’t repay a loan, the lender might appoint a receiver or agent to take control of your inventory or other valuables and auction them off to settle the debt. 

In a worst-case scenario like insolvency or bankruptcy, the GSA ensures the lender is first in line to get the money from liquidating those assets. Conversely, once you pay off the loan in full, the lender will release the GSA and end their claim on your property/remove the registration from the PPSR.

Where Will You Encounter GSAs in Australian Lending?

In practice, you’ll mostly see GSAs in a business lending context. Australian banks and private lenders use a lot of General Security Agreements for:

• Business loans
• Large commercial finance deals
• Any lending where they want a claim over a company’s assets

So don’t be surprised if you run a startup or small business and when you seek financing you see a GSA in the loan terms. Everything from equipment finance leases to invoice financing arrangements could involve a GSA as part of the security package. 

On the other hand, you won’t see a GSA in a standard home loan or car loan document – those are secured by the house or car itself (via a mortgage or vehicle lien), and not by a general charge over all assets. 

To sum up, a GSA agreement is all about a lender taking a security interest over a borrower’s assets so they can safeguard a loan. This obviously makes it a powerful tool, but that’s also how they make lending possible in cases where it might otherwise be too risky for the lender. 

So if you’re signing on as an individual or on behalf of a company, you need to appreciate that a GSA puts your assets on the line. 

How Upscore Can Help

Ready to take charge of your credit and finances? Understanding lending terms like GSA is a great start. Another smart step is to sign up for Upscore’s Finance Passport – a handy free tool that lets you compare multiple lenders and secure mortgages easier, from Australia to Europe.

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How to Calculate Rental Yield

When you invest in property in Australia, one of the first questions is: what’s the rental yield? It sounds fancy, but it’s basically your annual rent as a percentage of the property’s value – essentially how much bang for your buck you’re getting from rent each year.

We’ll break down how to calculate rental yield – it’s straightforward maths – using real examples from cities like Sydney and Melbourne. The formula works the same for a house in Sydney or a commercial space in regional NSW, though as you’ll see, typical yields can differ a lot. 

What is Rental Yield?

Rental yield is essentially the annual return on investment from rent, expressed as a percentage of the property’s value. It’s essentially “how much of my property’s price do I earn back in rent each year?” If you get $5,000 a year on a $100,000 property, that’s a 5% yield. Simple.

There are actually two types of yield that you need to get your head around: gross yield and net yield. Gross yield is the easy one – just rent versus property value. Net yield digs a bit deeper and accounts for expenses. Before we get ahead of ourselves, let’s go step by step, starting with the gross.

Gross vs Net Rental Yield (and How to Calculate Them)

Calculating gross rental yield is straightforward. You take the rental income for the year and divide it by the property’s value, then multiply by 100 to get a percentage. In formula terms, it looks like:

Gross Yield = (Annual Rental Income / Property Value) x 100

For example, if you were to buy a unit somewhere in Melbourne for $600,000 and you rent it out for $450 per week, the maths would be: $450/week comes to $23,400 per year. Then ($23,400/$600,000) x 100 = 3.9%. That’s what the gross yield would be on that property.

So, that Melbourne unit has a gross rental yield of about 3.9%. Gross yield gives you a quick snapshot of return, but it doesn’t really tell the whole story because it ignores costs. That’s why net rental yield is so important. So how does that one work?

Net rental yield factors in the costs of owning the property – so that’s expenses like the following:

• Council rates
• Insurance
• Maintenance

Property management fees

Those are all the less-than-ideal bills you have to pay as a landlord. The formula is similar to gross, but you subtract the annual expenses from the annual rent first:

Net Yield = ((Annual Rental Income – Annual Expenses) / Property Value) x 100

Using our Melbourne unit example from before, let’s say your yearly expenses are about $5,000 (which would be enough to cover things like strata fees, minor repairs, insurance, etc.). The maths would go like this: after expenses, your annual rent is $23,400 – $5,000 = $18,400. Divide $18,400 by $600,000 and multiply by 100, and you get roughly 3.1% as the net yield.

So the net yield is around 3.1%. That’s lower than the 3.9% gross because we took out the costs. This is the yield that really matters for your cash flow, because it’s your true profit from renting out the place.

If you own a property that’s easy to maintain (say a new apartment with no garden or old plumbing to worry about), your expenses stay low and your net yield stays close to the gross. But an older house in Sydney with leaky pipes or a big yard can rack up bigger bills and push the net yield down.

Both gross and net yields have their uses. Investors often look at gross yield first (it’s quick and headline-grabbing), but net yield is what you actually pocket. Keep an eye on both when you’re sizing up an investment.

Residential vs Commercial Rental Yields

So, does rental yield work differently for residential versus commercial properties? The calculation method is the same, but the numbers and considerations can differ a bit. 

In Australia, residential properties (like houses and apartments) often have lower yields but generally carry less risk. Commercial properties (like shops, offices, or warehouses) usually offer higher yields to entice investors, since they can come with higher risks or longer vacancy periods.

It’s common to see residential investment yields around 3-5% per year, while commercial property yields might range from 5% up to 8% or more. The higher yield on commercial places helps compensate for things like longer lease-up tims and generally higher volatility.

Another big difference is who pays the bills. In a residential rental, you (the landlord) cover most expenses. But with a commercial lease, the tenant often covers many outgoings (council rates, routine maintenance, etc.), which makes your life a lot easier. A good commercial tenant might even handle minor repairs themselves. Meanwhile, if you’ve got a residential tenant and the hot water system dies on a Sunday, guess who’s getting the call and the bill?

And don’t forget vacancies. A house might be empty only a couple of weeks between tenants, but a commercial property can sit vacant for months. That juicy 8% yield means nothing if the place is empty for that long.

What’s a Good Rental Yield in Australia?

Now the big question: what is a “good” rental yield? It’s a bit of a varied answer depending on where and what you’re buying. In general, a higher yield means more cash flow, but it might come with compromises. 

For example, properties in cheaper or regional areas tend to have higher yields. Darwin often tops the charts for rental yield – around 6% for houses – nearly double the yield in Sydney (which is a bit closer to 3%). Sydney’s property prices are obviously pretty high, so even a decent rent becomes a small percentage. Darwin has lower property prices and solid rents, hence the higher yield.

If you’re interested in this from an investment point of view, you also need to weigh yield against potential capital growth. A high yield might mean the property’s value doesn’t grow as quickly (maybe it’s in a town that’s not as popular as one like Sydney). 

Conversely, while a property with a low yield won’t give you much cash flow now, it might be in a promising suburb that’s looking like it is going to go up in price soon, so you’re banking on a bigger payday later.

So a “good” yield ends up being pretty relative. For residential properties, around 4-5% is pretty solid (since many houses are lower). For commercial properties, 6-8% is a good range. 

If someone tells you that a given property will have a ridiculously high yield, check the fine print. Is it after expenses? Is the rent realistic and steady? Often, ultra-high yield comes from one-industry towns – if that industry shuts down, there goes your tenant.

At the end of the day, calculating rental yield is simple – interpreting it properly is where it gets a bit harder. 

How Upscore Can Help

If you’re gearing up to invest – whether here or overseas – you’ll want your finances in top shape. Upscore’s Finance Passport can help by giving you access to multiple lenders and letting you compare offers – all for free. 

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How to Check Your Credit Rating

Your credit rating has a lot more influence over your financial life than you might realise. In Australia, mortgage providers and even some employers look at this score before they make a decision. 

A strong rating can land you a lower home loan rate and generally smoother approvals for major purchases. But a low score can mean higher interest or outright refusal. 

Ultimately, you get clear insight into where you stand and what steps to take next by regularly checking your credit rating.  Do it once a year, or after a big change – new job, new address or a loan application – and you’ll stay ahead of surprises.

Why Your Credit Rating Matters

Your credit rating essentially shows how reliably you repay what you owe. Lenders use it to decide if you’ll make repayments in full and on time. Landlords are similar since they might ask you to provide it to figure out if you’ll pay rent without any delays. Even insurers sometimes use credit files to gauge risk. 

So a strong rating can earn you competitive interest rates and flexible loan terms. A weaker rating, on the other hand, can lock you into higher costs or much longer applications. 

You won’t fully understand your financial options without checking your file yourself. Knowing your rating lets you negotiate with lenders or explore alternative finance.

Gathering What You Need

Before you dive in, gather a few key documents. You’ll typically need a driver’s licence or passport plus proof of address – think a recent utility bill or bank statement. Some services also ask for your Tax File Number, though that’s optional. 

Have your online accounts and passwords at hand, because you’ll create or log into a secure portal. Once your identity is confirmed, you can view or download your full credit report. If you spot something unfamiliar – like a loan you never took or an address you’ve never lived at – you can raise a dispute straight away. 

Checking Through Credit Reporting Agencies

Australia has three major credit reporting agencies: 

• Equifax
• Experian
• Illion

Equifax lets you view your file instantly when you sign up and you can pay a small fee to refresh it any time. Experian provides one free credit score plus the choice of a paid subscription for ongoing monitoring. Illion allows you to check your statement free once a year, and has paid plans for extra alerts. 

Each interface here differs, but each report shows you details like your:

• Credit accounts
• Payment history
• Defaults

Interpreting Your Credit Report

Once you’ve got your file in front of you, take a moment to breathe and read through it. Start with your personal details – name, address, date of birth – to ensure they match exactly. Next, look at your credit accounts: home loans, car loans, etc. Check the balance and repayment history for each. If you spot a late payment that shouldn’t be there, make a note to dispute it.

You’ll also see public records like bankruptcies or court judgments; these can stay on your file for several years, so it pays to understand their impact. Finally, review any credit inquiries that have been lodged by lenders. 

And remember that multiple hard inquiries in a short time can knock a few points off your score, so keep an eye on who’s checking your file.

Tips for Easy Maintenance and Improvement

Keep your credit card balances below 30% of the limit and always settle at least the minimum repayment by the due date. Also, swing in extra repayments on loans whenever you can – small amounts add up over time and show lenders you’re serious. 

Another good way is to set up calendar reminders or direct debits so you never miss a payment. It can also help if you avoid closing old accounts; seasoned lines of credit boost the length-of-history component. 

Lastly, when you shop around for new credit, do it within a tight time frame to limit the impact of multiple applications. This approach is how you can easily maintain your file while you build positive entries month after month. Over time, you’ll see your rating nudge upward.

Common Mistakes to Avoid

People often make two big errors when it comes to checking their credit. First, they ignore their file until a lender asks, which leaves little time to correct mistakes. Second, they think checking is a one-off task. Your financial life evolves – could be job changes or a new mortgage application, but either way, it can trigger fresh entries. Check at set intervals and after big changes. 

Another slip is assuming all credit inquiries are the same. A soft check – like the one you make for a free score – won’t actually affect your rating. A hard check – when you apply for a loan or credit card – can shave points off if done too often. Keep notes on when you apply and who you asked, so you know exactly what’s been logged.

When to Seek Professional Help

If your file contains serious issues – like a default you can’t explain or a public record you believe is incorrect – it might be time to call in the experts. A financial counsellor can guide you through the dispute process.

You might also want to speak with a credit repair specialist, but be cautious – only work with those registered with ASIC (Australian Securities and Investments Commission). If you’re overwhelmed by dozens of entries, it helps if you just focus first on the ones with the biggest impact: 

• Missed repayments
• Defaults
• Court judgments

Clearing just one of these gives your rating a decent boost and opens a few more doors to better finance options.

Tracking Changes Over Time

Your credit rating isn’t static. Interest rate fluctuations and new loan applications will both leave a mark. Make a note of your score throughout the year – could just be in a simple spreadsheet – and write down any changes in your circumstances. This helps you see any patterns. 

If your score dips right after a new credit card application, you’ll know why. If it climbs after you clear a debt, that shows your efforts have paid off. Over a year, you’ll map out what actions help your credit score the most, which means you can double down on positive moves and avoid the missteps that drag you down.

Final Thoughts

Checking your credit rating isn’t a one-and-done job. Treat it as a regular check-up – once a year or after any life-changing event. This could be a new job or a relocation. Even just any big new purchase. 

You’ll be able to spot errors or surprises early and fix them before they grow once you start checking your score. And remember to maintain your file with a few simple habits to keep your rating looking good:

• On-time payments
• Sensible balances
• Cautious credit shopping

You’ll get loads more options when it comes to interest rates and applications when you’ve got a healthy credit score. 

How Our Finance Passport Can Help

Finished checking your credit rating and want to start your homeownership journey? Use Upscore’s Finance Passport for free and access personalised mortgage options and lender comparisons.

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