Investment home loans
Investment loans are predominantly for borrowers who buy investment properties.
These investment properties may include; holiday homes with rental potential, homes
for children living away from home with rental or resale potential, residential
property with potential rental income and increasing value, additional and regular
income and tax benefits. The various loans which can be used for buying investment
properties include:
- Standard variable or fixed rate home loans – Most lenders will allow you to borrow
up to 95% of the price of your investment property.
- Equity home loan – Borrowing against the equity you’ve already accumulated.
- Interest only home loan – Repayments only cover the interest component with the
interest paid in full at the end of the home loan.
Advantages of Investment home loans
- Interest only options can be a positive for ensuring good cash flow by giving flexibility
to reduce loan payments or time periods
- Using lenders’ other loan features such as mortgage offset accounts, to help pay
the loan off sooner
Considerations – Investment home loans
- Most lenders will require borrowers have at least a 10% deposit and will only lend
up to 90% of the purchase price of the property
- Additional fees and costs
Investment home loans suitable for
Investment loans are suitable for borrowers who have an existing property or a deposit
and are able to make regular repayments.