Investment Property Mortgages: What You Need to Know

Investment Property Mortgages: What You Need to Know

Are you interested in investing in property in New Zealand? If so, you’ll likely need to obtain an investment property mortgage. But what exactly is an investment property mortgage, and how does it differ from a traditional home loan? In this article, we’ll explore the basics of investment property mortgages in NZ, including the benefits and risks, the application process, and more.

What is an Investment Property Mortgage?

An investment property mortgage is a type of loan that is specifically designed for those who are looking to invest in property. Unlike a traditional home loan, which is designed for individuals who plan to live in the property they purchase, an investment property mortgage is designed for those who plan to rent out the property and generate income from it.

Benefits of Investment Property Mortgages

There are several benefits to obtaining an investment property mortgage in NZ, including:

Tax Deductions

One of the biggest benefits of owning an investment property is that you can claim tax deductions on many of the expenses associated with the property, including mortgage interest, property management fees, repairs and maintenance, and more.

Passive Income

By renting out your investment property, you can generate a steady stream of passive income each month. This can be a great way to build wealth over time, as well as to diversify your investment portfolio.

Long-Term Appreciation

In many cases, property values tend to appreciate over time. This means that your investment property could be worth significantly more in the future than it is today, allowing you to realize a substantial return on your investment.

Risks of Investment Property Mortgages

While there are certainly benefits to owning an investment property, there are also risks to be aware of. Some of the potential risks of investing in property include:


If you’re unable to find tenants for your investment property, you’ll be responsible for paying the mortgage, property taxes, and other expenses out of your own pocket. This can be particularly challenging if you’re already stretched thin financially.

Market Fluctuations

The property market can be unpredictable, and property values can rise or fall rapidly. If you purchase an investment property at the wrong time, you may end up losing money on your investment.

Repairs and Maintenance

As a property owner, you’ll be responsible for maintaining and repairing the property. This can be time-consuming and expensive, particularly if major repairs are needed.

How to Apply for an Investment Property Mortgage

If you’re interested in obtaining an investment property mortgage in NZ, here are the basic steps you’ll need to follow:

1. Research Lenders

Start by researching lenders who offer investment property mortgages in your area. Look for lenders who specialize in investment property loans, as they will be more familiar with the unique requirements of these types of loans.

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2. Gather Documentation

Before you can apply for a loan, you’ll need to gather all of the necessary documentation, including proof of income, tax returns, and information about the property you’re interested in purchasing.

3. Complete the Application

Once you have all of your documentation in order, you can complete the loan application. This will typically include information about your income, credit score, and the property you’re interested in purchasing.

4. Await Approval

After you submit your application, the lender will review your documentation and determine whether or not to approve your loan. If you’re approved, you’ll be able to move forward with purchasing your investment property.


Investing in property can be a great way to build wealth and generate passive income over time. However, it’s important to understand the risks and benefits of investment property mortgages before you get started.