Unlock the secrets to Property Investment Loans

Your income stability and borrowing capacity put you in a position to build an investment portfolio that generates passive income and long-term equity growth.

The challenge for oncology pharmacists considering property investment right now is that the rules are changing. The negative gearing quarantine takes effect from 1 July 2027, and anything you acquire after 12 May 2026 will be subject to those rules unless it meets the new build definition. That means the way you structure your investment loan and the property you choose both carry more weight than they did 18 months ago.

This article walks through the investment loan features and borrowing considerations that apply specifically to oncology pharmacists looking to acquire property in the current environment.

What Investment Loan Features Matter After the Negative Gearing Changes

Investment loan features that preserve cashflow and flexibility become more important when rental losses can no longer be offset against your salary.

Interest-only repayment structures reduce your monthly outgoings by deferring principal repayments for a set period, usually five years. Consider an oncology pharmacist earning $145,000 who purchases an established apartment at current metro median prices. Under principal and interest repayments at current variable rates, monthly repayments sit around $3,200 on an 80 per cent loan to value ratio. Switching to interest-only during the initial holding period drops that to approximately $2,400 per month. The rental income might cover $2,000 of that, leaving a monthly shortfall of $400 instead of $1,200. From 1 July 2027, that $400 shortfall can only be claimed against future rental income or capital gains, not against your pharmacy income. The lower the shortfall, the less you rely on that deduction.

A split loan structure, where part of the loan is fixed and part is variable, allows you to lock in a portion of your interest cost while retaining access to offset and redraw on the variable portion. That offset facility matters when you are quarantining losses, you want the ability to reduce taxable interest wherever possible without triggering a refinance.

Does Buying a New Build Change the Borrowing Equation

Purchasing an eligible new residential dwelling allows you to continue offsetting rental losses against your salary under the existing negative gearing rules, even if you acquire the property after 12 May 2026.

The definition is narrow. The property must be constructed on previously vacant land or replace an existing dwelling where the total number of dwellings increases. A knock-down rebuild that results in the same number of dwellings does not qualify. A new apartment in a development replacing a former commercial building does qualify. The dwelling must also be genuinely new at the time you purchase it. If the developer or another investor occupies it for more than 12 months before selling it to you, the exemption is lost.

Lenders treat new build purchases differently from established property. Construction risk, valuation risk and settlement timing all influence the loan product and the rate you are offered. Many lenders will not advance funds until practical completion, which means you need to manage any deposit-stage payments separately. Some lenders offer progress payment structures, but these typically carry higher rates or reduced features during the construction phase. If you are buying off the plan, expect the lender to revalue the property at settlement, and if the valuation comes in below the contract price, you will need to cover the shortfall or renegotiate your loan amount.

How Lenders Assess Investment Loan Serviceability for Pharmacists

Lenders assess your ability to service an investment loan by applying a serviceability buffer of 3 percentage points above the product rate and including only a portion of the expected rental income.

Most lenders will include 80 per cent of the anticipated rental income in their serviceability calculation. That 20 per cent shading accounts for vacancy periods, maintenance costs and rental arrears. If the property is expected to generate $2,400 per month in rent, the lender will credit you with $1,920 in their assessment. Your existing commitments, including any owner-occupied home loan, personal loans, credit card limits and living expenses, are then deducted from your net income plus that rental credit. The result determines how much you can borrow.

The debt-to-income cap introduced in February 2026 also applies. Lenders can advance no more than 20 per cent of their new investor lending at a debt-to-income ratio of 6 times or greater. As an oncology pharmacist with an annual income around $145,000, that cap sits at $870,000. If you already hold an owner-occupied loan of $600,000, your total borrowing across both loans cannot exceed $870,000 without the lender breaching its prudential limit. In practice, most lenders will cap you well below that threshold to preserve flexibility across their portfolio.

Investment Loan Deposit and Equity Requirements

Most lenders require a minimum 10 per cent deposit for investment property, though some will lend at 90 per cent loan to value ratio if you are prepared to pay Lenders Mortgage Insurance.

If you are using equity from your existing home rather than cash savings, the lender will typically allow you to borrow up to 80 per cent of your home's current value, minus any outstanding loan balance. The amount you release must cover the deposit on the investment property plus all acquisition costs, including stamp duty, legal fees, building and pest inspections, and any LMI premium if applicable. Stamp duty on investment property in most states is calculated on the same basis as owner-occupied property, but you cannot access any first-home buyer concessions or exemptions. Budget between 5 and 7 per cent of the purchase price for total acquisition costs, depending on the state and property value.

Some lenders offer low deposit loans for pharmacists that reduce or waive LMI for medical and allied health professionals, including pharmacists. These arrangements are not universal and the definition of an eligible pharmacist varies between lenders. Oncology pharmacists employed in a hospital or clinical setting generally meet the criteria, but you will need to provide evidence of your role and registration.

Should You Fix or Keep Your Investment Loan Variable

A variable rate investment loan gives you access to offset accounts and unlimited additional repayments without penalty, which matters when you are managing cashflow across multiple properties and trying to minimise taxable interest.

Fixed rate products lock in your repayment for a set term, usually between one and five years. You gain certainty over your monthly cost, but you lose flexibility. Most fixed rate investment loans do not allow offset, and additional repayments are capped at $10,000 to $30,000 per year depending on the lender. If you need to refinance or sell before the fixed term ends, you will be charged break costs. Those costs can run into the tens of thousands of dollars if rates have fallen significantly since you fixed.

The most common structure for investment loans is a variable rate with offset, sometimes combined with a small fixed portion if you want partial rate protection. The variable portion allows you to deposit surplus income or rental proceeds into the offset account, reducing the interest you pay without losing access to those funds. That reduction in interest is not treated as a repayment, it just lowers the amount of interest that accrues, which in turn reduces your claimable deduction. You need to balance the tax outcome against the cashflow benefit.

What Investment Loan Refinance Looks Like After Acquisition

Refinancing an investment loan makes sense when you can secure a lower rate, access better loan features, or release equity for further investment.

Rate discounts on investment loans vary significantly between lenders and are often smaller than the discounts available on owner-occupied loans. A difference of 0.3 to 0.5 percentage points on a $500,000 investment loan translates to $1,500 to $2,500 per year in interest savings. If your current lender is not offering retention discounts and you have been on the same rate for more than 18 months, investment loan refinancing for pharmacists is worth exploring.

Equity release through refinancing allows you to access the capital growth in your existing investment property without selling it. If the property has increased in value and your loan balance has reduced, you may be able to borrow additional funds up to 80 per cent of the new valuation. Those funds can be used as a deposit for a second investment property, and the interest on that additional borrowing is deductible because the funds are being used to acquire an income-producing asset. You must keep the loans separate or apportion the interest correctly, borrowing against investment property equity for private purposes will leave part of the interest non-deductible.

How the July 2027 CGT Changes Affect Your Investment Strategy

From 1 July 2027, capital gains on residential investment property acquired after that date will be taxed using cost base indexation and a 30 per cent minimum tax rate, replacing the 50 per cent CGT discount.

Gains that accrued before 1 July 2027 on properties you already own will continue under the old rules. If you purchase an investment property before that date, the portion of the gain that accrues up to 30 June 2027 will be eligible for the 50 per cent discount, and only the gain accruing after that date will be subject to the new rules. The transitional treatment is applied on a time-apportioned basis.

For eligible new build residential properties, you can elect to use either the 50 per cent discount or the indexed cost base with the 30 per cent minimum tax. The choice depends on your marginal tax rate, how long you hold the property, and the rate of inflation over the holding period. If you are in the top marginal bracket and inflation is low, indexation may deliver a lower tax outcome. If inflation is higher or you hold the property for a shorter period, the discount may be preferable. You make the election at the time you lodge your tax return for the year in which the gain is realised.

Structuring Your Investment Loan to Align With Your Portfolio Goals

Your investment loan structure should reflect whether you are building a portfolio for passive income, capital growth, or both.

If your priority is cashflow and you plan to hold the property long-term, an interest-only loan with offset reduces your holding costs and preserves your capital for further investment. If your goal is to accelerate equity and eventually hold the property debt-free, a principal and interest loan forces discipline and reduces your loan balance steadily over time. You can switch between the two structures during the life of the loan, most lenders allow you to convert from interest-only to principal and interest without penalty, and some will allow you to switch back if your circumstances change.

Some oncology pharmacists choose to structure their investment loan inside a family trust or company for asset protection or tax planning purposes. That decision has implications for loan eligibility, interest rates, and land tax. Most lenders treat loans to trusts and companies as commercial or non-standard lending, which attracts higher rates and lower loan-to-value ratios. The land tax treatment varies by state, but in most cases you lose access to the tax-free threshold when property is held in a trust. You should work through the trade-offs with a licensed tax adviser before committing to a particular structure.

Call one of our team or book an appointment at a time that works for you. We can compare investment loan options from lenders across Australia and structure your finance to align with the rule changes coming in July 2027.

Frequently Asked Questions