What Banks Want to See

If you’re planning to grow your property portfolio in 2025, understanding what banks look for is critical. Investor lending rules have tightened over recent years, and lenders now scrutinise every detail of your application – from your income sources to your long-term investment history. By preparing the right way, you’ll not only improve your chances of approval but also secure more competitive rates.

1. Loan-to-Value Ratio (LVR) Matters More Than Ever

Banks place heavy importance on your LVR (Loan-to-Value Ratio). For investors, an LVR of 80% or lower remains the sweet spot in 2025. It reduces lender risk and helps you avoid costly Lenders Mortgage Insurance (LMI). If you’re pushing above 80%, expect banks to ask for stronger evidence of repayment capacity.

2. Proving Stable Income Streams

While salary income still forms the backbone of most applications, banks in 2025 are more flexible when assessing rental income, self-employed earnings, and even short-term rental returns (such as Airbnb). However, they typically shade rental income by 20–30% to account for expenses. Having diversified income sources gives you more credibility, especially in a market where lenders are cautious about serviceability.

3. Investment History Shows Experience

If you’ve successfully managed mortgages before, banks see you as a lower-risk borrower. A history of making repayments on time, maintaining equity, and holding investment properties long-term strengthens your case. For first-time investors, you may need to demonstrate strong savings discipline and a solid financial buffer to offset the lack of history.

4. How Your Assets Work in Your Favour

A paid-off home or strong equity position can make all the difference when applying for an investment loan. Many investors use equity as leverage to fund their next purchase. If you’d like to explore this strategy, read our full guide: How a Paid-Off Home Can Help You Borrow More for Your Next Property.

5. Buffers and Risk Management

In 2025, banks want to see that you’ve thought about more than just repayments. They look for cash reserves, offset accounts, and buffers for rising interest rates. Showing that you can withstand unexpected costs reassures lenders you won’t default when the market shifts.

Final Thoughts

NSW investors who prepare properly can unlock significant opportunities in 2025. By keeping your LVR low, proving stable income, leveraging equity, and maintaining strong financial buffers, you’ll be positioned exactly how banks want to see you.

At Truth Group, I help clients not just secure finance but also plan their investment journey strategically. If you’re looking to expand your property portfolio, let’s discuss how you can approach lenders with confidence.