(And why the cheapest rate is rarely the best strategy)
When a client with multiple investment properties came to me, they had already spoken with another broker who told them their borrowing capacity was $1.3 million. For Sydney, that simply wasn’t enough to secure the type of property that aligned with their strategy.
Instead of accepting the number on face value, we dug deeper into their full financial picture, their income, business structure, existing investments, and long-term goals. Once we analysed the full scenario, the outcome was clear: their true borrowing potential was significantly higher.
We found a viable path for them to borrow $1.6 million.
Not by stretching numbers.
Not by bending policy.
But by selecting a lender whose credit approach genuinely suited their situation better than a traditional bank could.
Of course, that choice came with a trade-off.
The Trade-Off: A Non-Bank Lender at 1% Higher Than the Majors
Most borrowers would stop at the headline rate. A non-bank lender with an interest rate one per cent higher than the major banks sounds like something to avoid. But in this situation, it was the smartest move they could have made. Here’s why…
1. Capital Growth Was Moving Faster Than the Cost of Interest
Waiting 12–24 months for bank servicing to catch up would have meant missing out on a rising market. Australian home prices hit new record highs over the past 12 months (source: realestate.com.au).
Rather than watching from the sidelines, this client positioned themselves inside that growth.
If you want a quick sense of your own numbers before exploring lender options, our Loan Repayment Calculator is a helpful place to start.
2. A Clear Refinance Path Back to a Major Bank
The strategy was simple: use the right lender now, then transition to a major bank once business financials improved and policy restrictions eased.
It was a 12-month plan, not a long-term commitment to a higher rate.
Many investors take this pathway, and it’s a strategy we support regularly through our full suite of lending solutions. To find out more, explore our services.
3. Short-Term Pain, Long-Term Gain
This was not about paying more interest forever.
It was about securing the right property at the right time and allowing the numbers to work in their favour.
The client proceeded with the purchase at $1.6 million.
One Year Later: How the Property Increased to $1.9M
One year after settlement, the property was valued at $1.9 million. The client then refinanced to a major bank and is now in a stronger lending position than when they started.
A $300,000 uplift in value.
A cleaner, more sustainable lending structure.
All achieved because they didn’t let a slightly higher interest rate obscure a strategic opportunity.
The Lesson: The Lowest Rate Is Rarely the Best Strategy
Had this client focused solely on securing the cheapest rate, they would have:
- Borrowed $300,000 less
- Missed out on $300,000 in capital growth
- Delayed their investment strategy by one to two years
Sometimes the smartest financial decision isn’t the lowest repayment today, it’s the decision that gets you the outcome you actually want.
If you’re considering your next move, our full range of solutions is outlined on our services page.
Want Your Borrowing Capacity Reviewed by a Finance Expert?
If your borrowing capacity feels restrictive or the numbers don’t seem to stack up, there are often strategic options you may not have been shown yet.
Get in touch if you’d like clarity around what is truly possible:
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