Home News Time to consider investment loan options

Time to consider investment loan options

Font size :

The improving economic outlook and strong property market fundamentals mean that many people are looking at making their first foray into the investment property market, while experienced investors may also be looking to expand their portfolio.

Whether a first-timer or an experienced property investor, getting the financing of your investment right from the outset is fundamental to investing success.

The many options to consider when investigating your investment loan options include:
• Interest-Only versus Principal & Interest
Many investors prefer to pay interest-only on their investment loan, particularly if they still have a loan on their owneroccupied property. This means that if the investor is looking to reduce debt, they can focus on reducing the nondeductible debt on the family home.
• Offset Account versus Redraw
Both offset accounts and redraw facilities can be a good way for an investor to help reduce their investment loan debt. However, caution needs to be exercised when putting money in and then pulling out from the redraw facility as this can have implications from a taxation point of view. Using an offset account may be a better option.
• Fixed versus Variable
This is probably one of the biggest considerations for anyone with a home or investment loan at the moment in the face of rising interest rates. A fixed rate is often preferred by investors as it provides certainty when managing cash flow, but at present there is a considerable gap between fixed and variable rates (of about two per cent), which means variable rates can look quite attractive. Alternatively, fixing a portion of the loan and having the remainder variable can provide the best of both worlds.
• Basic Loan versus Professional Packages
Basic loans are 'no frills' products that generally offer a lower interest rate with no or low monthly fees attached. In comparison, professional packages are a way of packaging a loan with extra benefits such as discounted interest rates and lower fees but generally have a fee attached.

All the many options on offer mean the guidance of an experienced personal mortgage adviser is a necessity for any property investor.

Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker

Mortgage News and Articles

Mortgage applications drop in second quarter Mortgage applications drop in second quarter

This marks the “beginning” of a downward trend, says Equifax executive Read more

To break monopoly, many smaller lenders could become banks To break monopoly, many smaller lenders could become banks The proposed change could break the Big Four’s monopoly over the mortgage market and help families get cheaper home loan rates ... Read more

Borrowing against the home: A strategy to pay for aged care Borrowing against the home: A strategy to pay for aged care Such debts can generally be divided into long-term and short-term loans ... Read more

NAB slashes growth forecasts for houses, units NAB slashes growth forecasts for houses, units Numerous factors, including tighter credit rules and the growing supply of new stock, have reined in Australia’s seemingly unstoppable housing market boom ... Read more

More mortgage news and articles

Sponsored Links

Saturday, Jul 22, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Whether you're a first homebuyer, looking to refinance, or investing, it's important to have the right loan for your needs. Just fill in a few details below and one of our trusted mortgage advisers will contact you.

A quick & easy way to find the right home loan
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords