Can You Use Investment Income from Shares or Managed Funds for a Home Loan?

Using Investment Income from Shares or Managed Funds for a Home Loan

Yes, you may be able to use investment income from shares, ETFs, managed funds, term deposits or cash investments for a home loan in Australia.

But lenders usually assess investment income carefully.

A borrower may have a large portfolio and assume the lender will use all of the income it produces. In reality, some lenders may only use part of the income. Some may use the lower figure from the last two tax returns. Some may use 80% of the income. Some may use a conservative deeming rate based on the investment balance. Others may exclude the income if the asset will be sold for the deposit, the income is not declared, or the return includes capital gains.

This guide explains how Australian lenders may assess investment income from shares, managed funds, ETFs, term deposits, cash accounts, investment portfolios and other non-property assets, based on current policy research.

Can investment income be used for a home loan?

Yes, some lenders may use investment income for a home loan.

A lender may consider investment income if:

• the investment is owned by the borrower, co-borrower or guarantor
• the income has been received previously
• the income is shown in tax returns, investment statements or bank statements
• the asset still exists
• the income is expected to continue
• the income is not a one-off capital gain
• the income is not being double-counted elsewhere
• any investment debt is declared
• the lender’s policy accepts investment income
• the loan passes servicing using the accepted income amount

Investment income can help borrowing power, but lenders often use a conservative figure.

What counts as investment income?

For home loan purposes, investment income may include income from:

• Australian shares
• international shares
• exchange-traded funds
• managed funds
• listed investment companies
• unit trusts
• cash management accounts
• savings accounts
• term deposits
• bonds or fixed interest investments
• annuities
• superannuation income streams
• investment portfolio distributions
• franked dividends
• unfranked dividends
• interest income
• foreign investment income

Some lenders group these income types together. Others treat each income type differently.

Investment income is not the same as investment assets

This is an important distinction.

An investment asset is the thing you own.

Investment income is the income that asset produces.

For example:

• shares are the asset
• dividends are the income
• managed fund units are the asset
• fund distributions are the income
• a term deposit is the asset
• interest is the income
• an ETF holding is the asset
• ETF distributions are the income

A large investment asset does not automatically mean the lender will use a large income figure.

The lender still needs to verify what income the asset produces and whether that income is likely to continue.

Why lenders assess investment income conservatively

Investment income can change.

A lender may be cautious because:

• companies can reduce dividends
• managed fund distributions can vary
• interest rates can rise or fall
• special distributions may not repeat
• capital gains may be one-off
• the portfolio may be sold before settlement
• the asset value may fall
• the income may belong to a trust or company
• the investment may have a margin loan attached
• the income may not be declared in tax returns

For a mortgage, the lender is assessing long-term repayment capacity. They may not rely on a one-off or unusually high investment return.

How much investment income will lenders use?

There is no single rule across all lenders.

Based on current policy research, lenders may calculate investment income in several ways.

A lender may use:

• 100% of verified investment income
• 80% of verified investment income
• the lower investment income figure from the two most recent tax returns
• the average investment income over two years
• the actual income shown in the latest tax return
• 12 months of credits to a bank account
• an investment statement showing income paid
• a conservative deeming rate based on the asset value
• no income if the evidence is insufficient

This means two lenders can assess the same portfolio very differently.

Why some lenders use only 80% of investment income

Some lenders shade investment income because it may not be guaranteed.

For example, if your portfolio produced $30,000 of income last year, a lender using 80% may only assess $24,000.

This may happen even if the income is shown in your tax return.

The lender may apply shading because:

• dividends can fall
• distributions can vary
• interest rates can change
• portfolio values can move
• investment income may include one-off amounts
• future returns are uncertain

An 80% treatment can still be helpful, but it may reduce borrowing power compared with using the full amount.

What is a deeming rate?

A deeming rate is a conservative assumed rate of return applied to the value of an investment asset.

Some lenders may use a deeming rate where actual investment income is unknown, not available or difficult to verify.

For example, if you have a verified investment portfolio worth $500,000 and the lender applies a 3% deeming rate, the assumed income may be $15,000 per year.

The lender may then use all of that amount or apply a further reduction, depending on policy.

A deeming rate may be used for assets such as:

• shares
• managed funds
• cash investments
• term deposits
• investment portfolios
• other liquid investment assets

The asset value must usually be verified before a deeming calculation can be used.

Deemed income vs actual income

Deemed income and actual income are different.

Actual income is what the investment has actually paid.

Deemed income is what the lender assumes the asset may reasonably produce.

For example:

• actual income may be shown in tax returns
• actual income may be shown in bank statements
• actual income may be shown in managed fund annual statements
• deemed income may be calculated from the current asset value

A lender may use deemed income if actual income is not available.

A lender may also use the lower of actual income and deemed income if policy requires a conservative approach.

What if actual investment income is higher than the deeming rate?

If actual investment income is higher than the deeming rate, the lender may still use the lower deemed figure.

For example, your share portfolio may have produced a 6% yield last year, but the lender may use a 3% deeming rate if their policy requires it.

This can happen where:

• income is irregular
• tax returns are not available
• the portfolio has changed
• dividends are unusually high
• a special dividend was paid
• the lender wants a conservative figure

To use actual income, the lender may need stronger evidence.

What if actual investment income is lower than the deeming rate?

If actual income is lower than the deeming rate, some lenders may use the lower actual income.

This is because the lender may not want to assume a return that the asset has not actually produced.

For example, a growth-focused share portfolio may have a large balance but low dividend income.

The lender may ask:

• what income has been received?
• are the investments income-producing?
• are returns mostly capital growth?
• has income been declared in tax returns?
• are distributions expected to continue?
• should the portfolio be deemed instead?

A large growth portfolio may not help borrowing power as much as a lower-value income portfolio.

Can share income be used?

Yes, share income may be used by some lenders.

Share income may include:

• franked dividends
• unfranked dividends
• listed company dividends
• dividend reinvestment income
• listed investment company dividends
• foreign dividends

A lender may ask for:

• tax returns
• dividend statements
• shareholding statements
• portfolio reports
• bank credits
• current holdings
• evidence that the shares are still owned

The lender may exclude one-off share sale profits or capital gains.

Can ETF income be used?

Yes, ETF income may be used by some lenders.

ETF income may include:

• dividends
• fund distributions
• interest income
• foreign income
• franking credits
• capital gains components
• return of capital components

A lender may need to understand what part of the ETF distribution is ongoing income and what part is capital gains.

Evidence may include:

• ETF annual tax statements
• broker reports
• bank credits
• portfolio statements
• tax returns
• current holding statements

If the ETF distribution includes a large one-off capital gains component, the lender may use a lower figure.

Can managed fund income be used?

Yes, managed fund income may be accepted by some lenders.

Managed fund income may include:

• income distributions
• dividends
• interest income
• foreign income
• capital gains distributions
• trust distributions
• franking credits

A lender may treat managed fund distributions as investment income, but may exclude capital gains if they are not recurring.

A managed fund statement may be useful because it can show the income breakdown.

Managed fund distributions are not always simple income

Managed fund distributions can include different components.

These may include:

• Australian income
• foreign income
• interest income
• franked dividends
• unfranked dividends
• capital gains
• tax-deferred amounts
• return of capital
• franking credits

A lender may not use the full distribution if part of it is a capital gain or non-recurring component.

This is why the annual tax statement can be more useful than a simple bank credit.

Can term deposit interest be used?

Yes, term deposit interest may be used by some lenders.

A lender may ask for:

• term deposit statement
• account holder name
• current balance
• interest rate
• interest payment frequency
• maturity date
• bank statements showing interest credits
• tax return evidence

The lender may also ask whether the term deposit will remain after settlement.

If the term deposit will be used for your home loan deposit, the interest income may no longer continue.

Can savings account interest be used?

Yes, interest income from savings accounts may be used by some lenders.

However, the lender may assess it conservatively because interest rates can change and savings balances can reduce.

A lender may review:

• account balance
• interest received
• tax return evidence
• bank statements
• whether the funds will be used for settlement
• whether the account is in the borrower’s name
• whether the income is ongoing

Interest income may be useful for large cash balances, but it may not help much if the balance is small or will be spent at settlement.

Can cash management account income be used?

Yes, income from a cash management account may be accepted if it is verified.

Cash management accounts are often linked to share portfolios or investment platforms.

A lender may ask for:

• account statement
• investment platform statement
• interest credits
• dividend credits
• distribution credits
• account holder name
• current balance
• tax statement
• evidence the funds remain invested

A cash management account can help trace income from investments, especially where dividends and distributions are paid into the account.

Can offset account interest be used?

Usually, no.

An offset account generally does not pay interest to you. Instead, it reduces the interest charged on your home loan.

For this reason, offset accounts are usually not treated as interest-bearing investment income.

A lender may consider money in an offset account as:

• savings
• available funds
• cash buffer
• funds to complete
• evidence of financial position

But it may not be used as separate investment income.

Can annuity income be used?

Yes, annuity income may be used by some lenders if it is ongoing and verifiable.

Annuity income may be assessed differently from share or managed fund income because it can be paid as a regular income stream.

A lender may ask for:

• annuity statement
• payment schedule
• bank credits
• term of annuity
• income amount
• whether payments are indexed
• whether payments are lifetime or fixed-term
• evidence the borrower is entitled to the income

If the annuity has a limited term, the lender may consider whether the income continues long enough for the proposed loan.

Can superannuation pension income be used?

Yes, superannuation pension income may be used by some lenders.

This may include:

• account-based pension income
• allocated pension income
• indexed pension income
• defined benefit pension income
• retirement income streams

A lender may ask for:

• superannuation statement
• pension statement
• bank credits
• evidence of payment amount
• evidence of account balance
• Centrelink statement, where relevant
• retirement income documentation

A lump sum withdrawal from super is usually different from an ongoing income stream.

Can lump sum investment withdrawals be used as income?

Usually, no.

A lump sum withdrawal from investments is usually not treated as ongoing income.

For example, selling shares or withdrawing from a managed fund may provide cash, but it does not prove ongoing income.

Lump sums may help with:

• deposit
• funds to complete
• debt reduction
• savings buffer
• repayment strategy

But they may not improve borrowing power as income unless there is an ongoing income stream.

Can investment income from overseas be used?

Possibly.

Foreign investment income may be accepted by some lenders, but it can be more complex.

A lender may consider:

• country of investment
• currency
• tax documents
• foreign withholding tax
• Australian tax treatment
• exchange rate conversion
• whether income is consistent
• whether the asset is still held
• whether the borrower lives in Australia
• whether foreign income is the sole income source

Foreign investment income may be shaded after conversion to Australian dollars.

Can investment income be your only income?

Possibly, but it can be harder.

If investment income is your main or only income source, the lender may assess it carefully.

They may ask:

• how consistent is the income?
• how long has the income been received?
• what is the portfolio value?
• are assets liquid?
• are there margin loans?
• is the income enough after shading?
• will assets be sold for deposit?
• what is the borrower’s age?
• what is the loan term?
• is there an exit strategy?
• can the income support the debt long term?

Some lenders may accept investment income as a supporting income source but be more cautious if it is the only income.

Can investment income be used with PAYG income?

Yes, investment income may be used with PAYG income if the lender accepts it.

This is common for borrowers who have:

• salary income
• share portfolios
• ETFs
• managed funds
• term deposits
• inherited investments
• employee share holdings
• personal investment accounts

The lender may use PAYG income at one rate and investment income at another.

For example, salary income may be used at 100%, while investment income may be shaded or deemed.

Can investment income be used with self-employed income?

Yes, but the application can become more complex.

A self-employed borrower may have:

• business income
• personal investment income
• company dividends
• trust distributions
• managed fund income
• retained profits
• interest income

A lender must avoid double-counting income.

For example, if income from a company is already included in business profit, it may not also be counted separately as investment income.

The lender may ask for tax returns, financial statements, trust documents and accountant evidence to separate each income source.

Related research: Self-Employed Home Loans: Which Australian Lenders May Accept 1-Year Financials, 1-Year ABNs or Alt Doc Income?

Can investment income from a trust be used?

Possibly.

If investments are held in a family trust or unit trust, the lender may assess the income as trust income rather than personal investment income.

They may ask for:

• trust tax returns
• trust financial statements
• distribution statements
• personal tax returns
• Notice of Assessment
• trust deed
• beneficiary details
• evidence of actual distributions
• accountant letter

Trust income can be accepted, but it usually needs more evidence than personally owned shares or managed funds.

Can investment income from a company be used?

Possibly, but company-held investments are not always treated like personal investment assets.

If a company owns shares, managed funds or term deposits, the lender may need to confirm whether income is paid to you personally.

They may ask for:

• company tax return
• company financial statements
• personal tax returns
• dividend statements
• shareholder details
• ownership percentage
• accountant confirmation
• bank credits
• evidence of distributions

Company investment income may not be usable unless it has been paid or distributed to the borrower, or can be assessed under business income policy.

Can SMSF investment income be used?

Usually, SMSF income is more complex.

If investment assets are held by a self-managed super fund, the income belongs to the SMSF, not automatically to the borrower personally.

A lender may treat SMSF income differently depending on the loan structure.

For a personal home loan, SMSF income may not be used unless it is paid to the borrower as an acceptable income stream.

For an SMSF loan, the lender may assess SMSF contributions, fund income, liquidity and property income under specialist SMSF lending rules.

Do not assume SMSF investment income can be used for a personal mortgage.

Does ownership matter?

Yes, ownership matters.

A lender usually needs the investment asset and income to belong to a borrower, co-borrower or acceptable guarantor.

The lender may ask whether investments are owned by:

• one borrower
• both borrowers jointly
• a spouse
• a company
• a trust
• an SMSF
• a parent
• a guarantor
• a business partner

If the income belongs to someone who is not part of the application, it may not be used.

What if investments are jointly owned?

Jointly owned investments may be used, but the lender may only include the borrower’s share of the income.

For example, if an investment portfolio is owned 50/50 and only one owner is on the loan application, the lender may only use 50% of the income.

The lender may check:

• ownership percentage
• tax return allocation
• investment statement names
• bank account ownership
• whether both owners are borrowers
• whether the other owner receives part of the income

Joint ownership should be disclosed clearly.

What if the investment income belongs to your spouse?

If your spouse is a co-borrower, their investment income may be used if acceptable.

If your spouse is not on the loan, the lender may not use their income unless there is a specific guarantor or servicing arrangement that allows it.

The lender may ask:

• who owns the asset?
• who declares the income?
• who receives the bank credits?
• is the spouse on the loan?
• is the spouse on title?
• is the spouse a guarantor?
• is the income legally available for repayments?

Ownership and application structure matter.

What if the investments will be sold for the deposit?

This is one of the most common issues.

If investment assets are sold to fund the deposit, the investment income may not continue.

For example, if you receive $15,000 per year from a managed fund but sell the whole managed fund to complete the purchase, the lender may not use that income.

The lender may ask:

• which investments will be sold?
• how much will remain after settlement?
• will income reduce?
• does the remaining portfolio still produce income?
• are sale proceeds enough for funds to complete?
• will capital gains tax apply?
• is the income still needed for servicing?

Investment income should usually be based on assets that remain after settlement.

What if only part of the portfolio is sold?

If only part of the portfolio is sold, the lender may reduce the income proportionately or reassess the remaining portfolio.

For example, if you sell 40% of a share portfolio for the deposit, the lender may not continue using 100% of the previous dividend income.

They may ask for:

• updated portfolio statement
• sale confirmations
• remaining holdings
• remaining account balance
• expected income from remaining assets
• tax impact of the sale
• updated funds-to-complete position

A partial sale can still leave usable investment income, but it needs to be recalculated.

Can investment income be used if assets are used as security for a margin loan?

Possibly, but lender treatment may be more conservative.

If investments are secured by a margin loan, the lender will assess both the asset income and the investment debt.

A margin loan can affect servicing because:

• interest must be paid
• the loan may have a variable balance
• a margin call could occur
• dividends may be used to service the margin loan
• portfolio value may fluctuate
• the lender may discount income from secured shares

The lender may ask for margin loan statements and portfolio reports.

Can investment income be used if there is investment debt?

Yes, but the debt must be included.

Investment debt may include:

• margin loans
• investment lines of credit
• personal loans used to buy shares
• business loans tied to investments
• company debt
• SMSF borrowing
• related-party loans

The lender may include repayments or interest costs when assessing affordability.

Investment income is not assessed in isolation.

Can investment income improve borrowing power?

Yes, investment income can improve borrowing power if the lender accepts it.

It may help if:

• the income is consistent
• the asset remains held
• tax returns support the income
• investment statements are available
• debts are low
• LVR is acceptable
• the lender uses a fair calculation
• the income is not one-off
• there is no major margin loan

Investment income may not help much if:

• it is heavily shaded
• it belongs to a company or trust
• it comes from capital gains
• the portfolio will be sold
• the lender uses a low deeming rate
• there is limited evidence
• the income is not needed for servicing

Related research: Do Credit Card Limits Affect Your Home Loan Borrowing Power?

Can capital gains be used as investment income?

Usually, no.

Capital gains are generally treated as one-off investment proceeds, not recurring income.

This may include:

• profits from selling shares
• managed fund capital gains components
• gains from selling ETFs
• gains from selling crypto
• gains from selling business assets
• gains from selling other investments

Capital gains may help your cash position, but lenders usually do not rely on them as ongoing repayment income.

Why capital gains are treated differently

Capital gains usually require an asset sale.

A mortgage needs ongoing income to support repayments.

A dividend, distribution or interest payment may continue while the asset is still owned. A capital gain usually occurs because an asset was sold.

The lender may ask:

• was the gain one-off?
• will the asset remain held?
• can the gain repeat?
• was the gain caused by market movement?
• is the borrower a professional trader?
• is the income declared as business income?

For most borrowers, capital gains are not treated like salary or recurring investment income.

Can investment trading income be used?

Possibly, but this is different from passive investment income.

If you actively trade shares, options, crypto or other assets, the lender may not treat profits as ordinary investment income.

They may assess it as:

• business income
• speculative income
• capital gains
• self-employed income
• unacceptable income, depending on policy

Evidence may include:

• tax returns
• trading statements
• accountant letter
• business financials
• bank statements
• proof of consistent trading profit

Many lenders are cautious with trading income because it can be volatile.

Can crypto investment income be used?

Crypto income is generally more difficult.

Some borrowers may receive crypto-related income from:

• staking
• yield products
• trading
• token distributions
• mining
• lending platforms
• capital gains

Many lenders may not accept crypto income because it is volatile, difficult to verify or not covered clearly under policy.

If crypto income is relevant, evidence may include:

• tax returns
• exchange statements
• wallet records
• bank credits
• accountant confirmation
• transaction reports

Even with evidence, the lender may exclude it or treat it conservatively.

Can investment income be used for a refinance?

Yes, investment income may be used for refinancing if the lender accepts it.

A refinance may involve:

• switching lenders
• reducing your interest rate
• consolidating debts
• accessing equity
• releasing cash out
• removing a guarantor
• restructuring debt
• refinancing after retirement

The lender may still need to verify that the investment income is ongoing and that the assets remain held.

If cash out is being used to invest, the lender may not use future expected investment income unless policy allows it.

Related research: Can Australian Expats Refinance a Property and Release Equity Using Foreign Income?

Can investment income be used for an investment property loan?

Yes, investment income may be used for an investment property loan if accepted by the lender.

The lender may assess:

• employment income
• investment income
• rental income
• existing home loan repayments
• proposed investment loan repayments
• property expenses
• investment debt
• living expenses
• portfolio income
• serviceability buffers

Investment income may help, but investment property loans are still assessed under lender servicing rules.

Can investment income help first-home buyers?

Yes, investment income may help first-home buyers if the income is verified and the assets are not fully sold for the deposit.

This may apply to first-home buyers who built an investment portfolio before buying a property.

The lender may review:

• deposit source
• genuine savings
• portfolio value
• investment income history
• tax returns
• bank credits
• whether shares will be sold
• HECS or HELP debt
• credit cards
• LVR
• lenders mortgage insurance

If the investment portfolio is sold for the deposit, the future income may need to be reduced.

Can investment income be used after retirement?

Yes, investment income may be used after retirement if the lender accepts the income and the loan structure is appropriate.

For retired borrowers, lenders may also consider:

• age
• loan term
• retirement income
• superannuation income
• annuity income
• investment portfolio income
• asset position
• exit strategy
• living expenses
• healthcare costs
• repayment capacity over the proposed term

A retired borrower with strong investment income may still need a suitable loan term and repayment strategy.

Does LVR matter when using investment income?

Yes, LVR can matter.

LVR means loan-to-value ratio. It compares the loan amount to the property value.

An investment-income application may be easier if:

• the LVR is lower
• no lenders mortgage insurance is required
• the borrower has strong assets
• the property is standard residential security
• investment income is not the only income source
• debts are manageable
• evidence is complete

A higher-LVR application relying heavily on investment income may require stronger evidence.

Does lenders mortgage insurance affect investment income?

Yes.

If lenders mortgage insurance applies, investment income may be assessed more conservatively.

This can matter where:

• the deposit is below 20%
• investment income is needed to pass servicing
• the income is irregular
• the portfolio has changed
• the portfolio will be partly sold
• assets are held in a trust or company
• there is margin lending
• the property is non-standard

A lender may accept the income, but the mortgage insurer may still require further evidence or a lower income figure.

What documents do lenders need for investment income?

The exact documents depend on the lender and income type.

You may need:

• two most recent personal tax returns
• Notices of Assessment
• investment portfolio statements
• managed fund annual tax statements
• ETF annual tax statements
• dividend statements
• term deposit statements
• cash management account statements
• bank statements showing income credits
• broker holding reports
• share registry statements
• annuity statements
• superannuation pension statements
• trust tax returns, if assets are held in trust
• company financials, if assets are held by a company
• margin loan statements, if applicable

The lender may ask for current asset evidence and historical income evidence.

What should an investment portfolio statement show?

A useful investment portfolio statement should show:

• investor name
• account number or portfolio identifier
• current holdings
• current value
• statement date
• income paid
• distribution history
• dividend history
• cash balance
• ownership structure
• investment provider
• whether the asset is still held

The statement should be recent enough for the lender to confirm the portfolio still exists.

What should a managed fund statement show?

A managed fund statement should ideally show:

• investor name
• fund name
• number of units held
• current balance
• distribution payments
• annual tax statement details
• capital gains components
• income components
• franking credits
• foreign income
• statement date
• fund manager details

Managed fund income can be complex, so the annual tax statement may be especially useful.

What should a term deposit statement show?

A term deposit statement should ideally show:

• account holder name
• current balance
• interest rate
• maturity date
• interest payment frequency
• bank or provider name
• account number
• whether interest is paid or reinvested
• whether the funds are still held

If the term deposit matures before settlement and will be used as deposit, future interest may not be included.

What if the latest tax return is not available?

If the latest tax return is not available, the lender may still consider other evidence depending on policy.

Possible evidence may include:

• investment statements
• annual tax statements
• bank credits
• broker reports
• dividend statements
• managed fund statements
• term deposit statements
• accountant letter

However, tax returns are often useful because they show declared income.

If investment income is essential to borrowing power, waiting for the latest tax return may improve lender options.

What if investment income is not declared in tax returns?

This can be a problem.

Lenders generally prefer income that is declared and verifiable.

If investment income is not shown in tax returns, the lender may ask:

• was the income earned after the tax year?
• has the tax return not been lodged yet?
• does the income belong to another entity?
• was the income reinvested?
• was the income incorrectly omitted?
• is an amended return needed?
• is the income actually taxable?

Undeclared income may not be accepted.

What if distributions are reinvested?

Reinvested distributions can be complex.

If income is automatically reinvested, it may still appear in tax records even though it is not paid into your everyday bank account.

A lender may ask:

• are distributions paid in cash or reinvested?
• can reinvestment be stopped?
• does the income appear in tax returns?
• is the asset still held?
• does the lender consider reinvested income usable?
• is cash flow available for loan repayments?

Some lenders may use reinvested income if it is verified. Others may be more cautious because it is not cash received.

What if investment income is paid into a brokerage account?

Investment income may be paid into a brokerage account, cash management account or platform account instead of a normal bank account.

This can still be acceptable if the income can be traced.

The lender may ask for:

• brokerage cash account statement
• platform transaction history
• dividend credits
• distribution credits
• withdrawal history
• tax statement
• account holder details
• evidence funds are accessible

The key is showing that the income belongs to you and can be verified.

What if investment income varies each year?

Variable investment income may still be accepted, but the lender may use a conservative figure.

A lender may consider:

• two-year average
• lower of two years
• latest year only
• deemed income
• current portfolio balance
• whether income has reduced
• whether a one-off payment inflated income
• whether investments were sold or changed

If investment income is falling, the lender may use the lower current income.

If investment income has increased, the lender may ask whether the increase is sustainable.

What if the portfolio has recently increased?

A larger portfolio may support higher future investment income, but the lender may not use expected income automatically.

The lender may ask:

• where did the new funds come from?
• have the new investments produced income yet?
• are the holdings income-producing?
• is there an investment statement?
• will any assets be sold for the deposit?
• is there investment debt?

If the portfolio was recently created, the lender may use a deeming rate rather than actual historical income.

What if the portfolio has recently decreased?

A lower portfolio value may reduce usable income.

The portfolio may decrease because:

• shares were sold
• market values fell
• funds were withdrawn
• assets were used for deposit
• investments were transferred
• margin lending reduced the balance
• the asset mix changed

If the asset base is lower, the lender may reduce investment income even if past tax returns show higher income.

10 common mistakes with investment income

1. Do not assume the lender will use all investment income.
2. Do not include capital gains as ongoing income.
3. Do not rely on income from investments you plan to sell.
4. Do not ignore margin loans.
5. Do not assume a large portfolio means high serviceability income.
6. Do not treat trust or company income as personal investment income without evidence.
7. Do not forget that reinvested income may need explanation.
8. Do not assume offset accounts produce investment income.
9. Do not use undeclared income.
10. Do not apply without current portfolio statements.

How to improve your chances of using investment income

Before applying, it helps to organise the evidence properly.

Useful steps include:

• collect your two most recent tax returns
• collect Notices of Assessment
• collect current portfolio statements
• collect managed fund annual tax statements
• collect ETF annual tax statements
• collect term deposit statements
• collect bank statements showing income credits
• identify capital gains components
• identify reinvested distributions
• disclose margin loans
• confirm which investments will be sold for deposit
• update portfolio statements after any sale
• avoid double-counting company or trust income
• compare lender policy before applying

The clearer the income and asset evidence, the more accurately the lender can assess the application.

Should you wait before applying?

Sometimes waiting can help.

Waiting may improve your options if:

• the latest tax return is nearly ready
• a managed fund annual statement is due soon
• your portfolio has recently changed
• you recently bought income-producing assets
• you are about to sell investments for deposit
• a margin loan is being paid out
• investment income is essential for servicing
• current evidence is incomplete

You may not need to wait if:

• investment income is consistent
• tax returns already verify the income
• current portfolio statements are available
• the assets will remain after settlement
• the lender can use a deeming rate
• investment income is only supporting the application

A broker can compare whether applying now or waiting would improve your lender options.

Example scenarios

Scenario 1: PAYG borrower with ETFs and managed funds

You earn a salary and receive managed fund and ETF distributions each year.

Some lenders may include part of the investment income if tax returns and current portfolio statements support it.

Scenario 2: Large portfolio but low income

You have a $700,000 growth-focused portfolio that produces only $8,000 per year in income.

The lender may use the actual income or a conservative deeming method, depending on policy.

Scenario 3: Shares being sold for deposit

You plan to sell most of your shares to complete the property purchase.

The lender may reduce or exclude future investment income because the assets will no longer produce the same income.

Scenario 4: Managed fund distribution includes capital gains

Your managed fund paid a large distribution, but part of it was capital gains.

The lender may exclude the capital gains component and use a lower ongoing income figure.

Scenario 5: Term deposit interest

You have a large term deposit producing interest income.

The lender may use the interest if the funds will remain invested, but may exclude future interest if the term deposit is being used for deposit.

Scenario 6: Trust-owned investment portfolio

A family trust owns the investments and distributes income to you.

The lender may need trust tax returns, personal tax returns and evidence of actual distributions before using the income.

So, can you use investment income from shares or managed funds for a home loan?

Yes, you may be able to use investment income from shares, ETFs, managed funds, term deposits or other investment assets for a home loan.

The strongest applications usually have:

• consistent investment income
• tax returns showing declared income
• current investment statements
• assets still held after settlement
• clear ownership
• no reliance on one-off capital gains
• no undisclosed margin loan
• manageable debts
• suitable deposit or equity
• lender policy that accepts investment income

Investment income can help borrowing power, but lenders may use a reduced or deemed figure rather than the full amount received.

Need help using investment income for a home loan?

A mortgage broker can help compare lenders that may consider investment income from shares, ETFs, managed funds, term deposits, cash investments, annuities and investment portfolios.

We can review your tax returns, investment statements, portfolio value, ownership structure, margin loans, deposit, LVR and borrowing power before you apply.

If you rely on investment income and want to buy or refinance, speak with a mortgage broker who understands how different lenders assess non-property investment income.