Key Takeaways
- Eligible accountants can often buy an investment property with a 10% deposit and no LMI through the professional waiver, where the lender extends it to investment loans.
- Other low-deposit routes include paying LMI, using equity in an existing property, or a guarantor.
- Investment lending is typically assessed more conservatively than owner-occupied, with rental income shaded and the same serviceability buffer applied.
- Buying with a smaller deposit preserves cash for further purchases but raises leverage across the whole portfolio, which is the key trade-off.
For accountants building a property portfolio, the deposit is often the constraint that decides how fast they can grow, and tying up 20% in every purchase slows that down considerably. With variable rates around the 6% mark and prices still firm, the ability to buy an investment property with less than a full deposit can be the difference between one purchase and several. The good news is that accountants have routes most investors do not, but investment lending carries its own rules, and understanding them matters before you stretch your deposit across more properties.
Structuring a low-deposit investment purchase so it does not stall your next one is something a mortgage broker for accountants can plan with you. This article explains whether accountant investors can buy with less than 20% down, the paths available, how investment lending differs from owner-occupied, and the serviceability test that applies across the board.
The Short Answer for Accountant Investors
It is worth stating the position plainly before getting into the detail. Yes, accountant investors can frequently buy an investment property with less than a 20% deposit. The professional Lenders Mortgage Insurance (LMI) waiver that lets eligible accountants borrow above 80% without the premium often extends to investment loans, not just owner-occupied purchases, where the lender’s policy allows. Beyond the waiver, the same low-deposit mechanisms available to any investor, paying LMI, drawing on existing equity, or using a guarantor, are also open to accountants. The real question is not whether it is possible, but which route preserves the most capacity for the next purchase.
The Low-Deposit Paths for Investors
There are several ways an accountant investor can get below the 20% mark, and they suit different stages of a portfolio. Each has a different cost and a different effect on future borrowing.
The Professional Waiver on Investment Loans
Many lenders extend the accountant LMI waiver to investment lending, allowing eligible accountants to borrow up to 90% of the value, and sometimes 95%, without the premium. The terms can differ from owner-occupied lending, with the maximum loan-to-value ratio (LVR) or loan size sometimes lower for investment purposes, so the waiver needs matching to a lender whose investment policy supports it.
Using Equity From an Existing Property
Investors who already own property can often draw on the equity they have built, the difference between a property’s value and what is owed on it, to fund the deposit on the next purchase. This can avoid the need for fresh cash savings, and for an accountant the waiver may allow the new borrowing to sit above 80% without LMI, though it does increase total debt across the portfolio.
Paying LMI or Using a Guarantor
Where the waiver does not apply, paying the LMI premium still allows a purchase with as little as a 5% to 10% deposit, and the cost can sometimes be added to the loan. A guarantor, usually a family member offering equity as security, is another route to a smaller deposit, though it is less commonly used for investment purchases than for first homes.
How Investment Lending Differs From Owner-Occupied
It is important to know that lenders treat investment loans more cautiously than owner-occupied ones, which affects both your deposit and your capacity. The differences are worth planning around.
Lenders generally regard investment lending as higher risk, so maximum LVRs can be lower and pricing a little higher than for an owner-occupied loan. When assessing serviceability, they include rental income but usually shade it, often counting only around 70% to 80% of it, to allow for vacancies and costs. They then test your ability to repay at the actual rate plus a buffer of 3 percentage points set by the Australian Prudential Regulation Authority (APRA), which at current rates means roughly 9%, applied across all your loans, not just the new one. For an investor, this cumulative assessment is what most often limits how many properties you can hold, which is why structure matters as much as deposit.
The Trade-Off of Buying With Less
Buying with a smaller deposit is a deliberate portfolio strategy, not just a convenience, and weighing it properly is part of investing well. The benefit and the risk are two sides of the same coin.
Using a smaller deposit, especially with the waiver removing the premium, preserves cash that can go toward the next purchase, which is how many investors grow a portfolio faster than saving 20% each time would allow. The flip side is higher leverage across every property, meaning larger loans, higher repayments, and greater exposure if values fall or rates rise. Spreading thin deposits across several properties can also leave little buffer if circumstances change. The sensible approach is to treat a low deposit as a tool for measured growth rather than maximum speed, sizing your borrowing to what the portfolio can comfortably carry through a downturn, not just what a lender will approve today.
Frequently Asked Questions (FAQs)
Can accountant investors avoid LMI on an investment property?
Often yes. Many lenders extend the professional LMI waiver to investment loans, letting eligible accountants borrow above 80% without the premium, though the terms can differ from owner-occupied lending and the maximum LVR or loan size may be lower. The waiver must be requested and your membership evidenced, and not every lender applies it to investment purchases.
What is the minimum deposit for an accountant buying an investment property?
With the waiver, eligible accountants can often buy with a 10% deposit, and sometimes 5%, without LMI where the lender allows it for investment loans. Without the waiver, paying LMI can allow a similar low deposit, while using equity from an existing property is another common route for investors.
Is rental income counted toward my borrowing capacity?
Yes, but usually not in full. Lenders typically shade rental income, often counting around 70% to 80% of it, to allow for vacancies and costs, and they assess your repayments at the actual rate plus a 3 percentage point buffer across all your loans. This is why rental income helps but does not fully offset the cost of additional borrowing.
Can I use equity instead of a cash deposit?
Often yes. If you own property with equity, the difference between its value and what you owe, you can frequently draw on it to fund the deposit on an investment purchase. For an accountant, the waiver may let the new borrowing sit above 80% without LMI, though it does increase your total debt and should be weighed accordingly.
Is a smaller deposit riskier for investors?
It carries more risk. A smaller deposit means higher leverage, larger loans, higher repayments, and greater exposure if values fall or rates rise, and spreading thin deposits across several properties leaves less buffer. The strategy can accelerate portfolio growth, but it should be sized to what you can comfortably hold through a downturn.
Does the waiver apply the same way for investment as for owner-occupied?
Not always. Many lenders offer the waiver on both, but the terms can differ, with investment lending sometimes capped at a lower LVR or loan size and priced slightly higher. The concession needs to be matched to a lender whose investment policy supports your purpose, which is where profession-specific lending knowledge helps.
The Bottom Line
Accountant investors can frequently buy property with less than a 20% deposit, often with a 10% deposit and no LMI through the professional waiver where the lender extends it to investment loans, and otherwise by paying LMI, using existing equity, or a guarantor. Investment lending is assessed more conservatively than owner-occupied, with rental income shaded and the actual rate plus 3 percentage points applied across your whole portfolio, so serviceability tends to be the real constraint. Buying with less preserves cash for further purchases but raises leverage across every property, so the soundest approach is to size your borrowing to what the portfolio can comfortably carry, not just what a lender will approve.