Trusts. They sound like the domain of big-time moguls and corporate lawyers, but more and more Aussie investors are using them as a tool to grow and protect their property portfolios. The catch? Lending through a trust isn’t as simple as taking out a loan in your own name – and 2025’s lending landscape has made the rules even trickier.
So, is it worth it? Let’s take a look.
Why Investors Love Trusts
At their best, trusts can be a savvy investor’s best friend. They offer asset protection (think shielding your properties from legal claims), flexible income distribution (handy come tax time), and a way to future-proof your portfolio for the next generation.
But while the benefits stack up on paper, lenders see trusts with a more cautious eye. And if you’re not across the fine print, you could find your borrowing power clipped before you even make an offer.
Lenders and Trusts: A Complicated Relationship
Here’s where things get real. Lenders in 2025 are back to lending again after the recent rate cuts, but they haven’t forgotten the tighter credit days of the past few years. When it comes to trusts, they’ll want to see more than just a strong portfolio – they’ll dig into:
- The trust deed (to make sure it allows borrowing)
- Who’s standing behind the loan (usually you, the investor, as guarantor)
- How the trust earns income and distributes it
Some lenders are trust-friendly and offer competitive rates. Others? Not so much – they might treat trust loans with extra caution, reducing your borrowing power or adding conditions.
The Pros and Cons
The upside:
- Protect your assets from lawsuits or creditors
- Distribute income to family members in lower tax brackets
- Smooth succession planning for your portfolio
The downside:
- Fewer lender options
- More hoops to jump through (extra paperwork, longer approval times)
- Sometimes slightly higher rates or tougher terms
Should You Borrow in a Trust?
That depends on your game plan. If you’re serious about building a multi-property portfolio and protecting your wealth, a trust could be a smart play.
But you’ll want a broker in your corner who knows which lenders roll out the welcome mat – and which ones put up roadblocks.
Thinking about your next move?
Before you set up that shiny new trust or dive into an application, chat with us at Zinger Finance. We’ll help you weigh up the pros and cons and show you the smartest way to structure your loan in today’s market.
