Investment Property Loans › How do lenders assess rental income on an investment loan?

How do lenders assess rental income on an investment loan?

Lenders usually do not count all of the expected rent. They apply a shading factor, often using around 70 to 80 percent of the rent, to allow for vacancies and costs such as management and maintenance.

Written by Ross McFarlane, Licensed Mortgage Broker (Credit Representative 526725). About the author

Why this matters

This shading often surprises new investors, who assume the full rent counts toward serviceability. Lenders discount it to stay conservative, which can reduce your borrowing power below what you expected. Different lenders shade differently, so the same property can support a larger loan at one lender than another.

The key points

Lenders shade rental income, not count it in full.
Often around 70 to 80 percent is used.
This allows for vacancies and running costs.
Shading rules vary between lenders.

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Last reviewed: June 2026

General information only. This page provides general information about home loans and is not financial or credit advice, a quote, or a guarantee, and your personal circumstances have not been considered. Lending policies, interest rates, fees and eligibility vary by lender and change over time. Always confirm your own situation with a licensed mortgage broker or lender before acting. Ross McFarlane (Credit Representative 526725) is an authorised Credit Representative of Australian Associated Advisers Pty Ltd t/a Keylend, Australian Credit Licence 392169.