Trust Lending Has Changed

Written By Alexander Watson

But Smart Investment Strategies Haven’t

If you’ve been anywhere near property investment circles lately, you’ve probably heard the noise around trust lending tightening and the end of a particular strategy investors had relied on for years.

Macquarie Bank’s policy update was the big trigger.
For a long time, brokers could submit trust applications where certain trust debts weren't assessed in a traditional way — creating a rinse-and-repeat style of borrowing capacity that simply wasn’t sustainable.

The truth?
It was always going to change.

And for many investors, that shift felt like the door had slammed shut.

But here’s the reality no-one is talking about:

Investment lending hasn’t died — it has just evolved.

Borrowing through trusts is still alive.
Portfolio building is still very achievable.
The strategy has simply shifted away from loopholes and back to what genuinely works:
structure, cashflow, sequencing, and smart lender selection.

Let’s break it down.

What Actually Changed With Trust Lending?

Macquarie has returned to a more traditional interpretation of all trust liabilities and commitments.

In practice, this means:

  • trust debt is now assessed like any other investment debt

  • borrowing capacity is more realistic and sustainable

  • portfolio progression needs to be planned, not looped

It’s a return to fundamentals.
Not a collapse — just a reset.

Now for the part everyone actually cares about:

“So what strategies are still available for investors who want to grow a portfolio using trusts?”

Plenty.

The Smart Investment Strategies Still Available After the Shift

Below are the approaches Australian investors are using right now to keep building strong, sustainable portfolios — without relying on a loophole.

1. Multi-Entity Structuring (the sustainable version)

Trusts still work.
Companies still work.
Personal names still work.

But the power today sits in sequencing — understanding which entity to use at which stage of the journey.

A typical sustainable pathway might involve starting personally for capacity reasons, then transitioning to trust-based structures as equity grows.

2. Trust-Friendly Lender Sequencing

Not all lenders treat trust income, distributions, or liabilities the same way.

Some assess trust debt heavily.
Others treat it more favourably.
A handful are exceptionally flexible — when the structure is right.

Choosing the right order of lenders is now one of the most important drivers of portfolio growth.

3. Cashflow-First Investment Lending

The era of “set and forget” is gone.
Cashflow dictates everything.

Modern investment lending needs to consider:

  • interest-only vs P&I (and the timing of each)

  • offsets for cash management

  • staged purchase timelines

  • buffer management

  • realistic servicing pathways

Smart cashflow = continued borrowing capacity

4. Equity Unlocking and Creative Refinancing

Equity is still the biggest lever investors have — but how you access it matters.

Without loopholes, investors are now focusing on:

  • refinancing through the entity with the strongest serviceability

  • splitting loans to avoid bottlenecks

  • using valuations strategically

  • rolling equity from personal into trust pathways

Done correctly, equity can fuel an entire portfolio.

5. Multi-Trust and Company Structures (advanced strategies)

These strategies absolutely still exist — but only for investors with:

  • steady income

  • strong buffers

  • clear long-term goals

  • a portfolio vision

They offer tax flexibility, asset protection, and scalability — but require proper planning and advice.

So… Did the Macquarie Policy Kill Trust Lending?

Not even close.

If anything, it has pushed the industry back toward:

  • better structure

  • responsible growth

  • clearer long-term planning

  • genuine cashflow modelling

  • smarter entity selection

The “easy version” of trust lending is gone.
The strategic version is now the main game — and honestly, it’s the version that was always going to win long term.

The Bottom Line for Investors

Trust lending isn’t dead.
Investment lending isn’t restricted.
Portfolio growth absolutely still exists.

You just need a plan that:

  • aligns entity structure with serviceability

  • manages cashflow proactively

  • uses lenders in the right sequence

  • and understands how equity should be recycled

This is what separates an investor who buys one property…
from an investor who builds a portfolio that lasts for decades.

Alexander Watson
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