Securing investment home loans at low rates

An investment loan is a type of loan you can take out for the primary purpose of of investing in a property. This functions like a home loan, however, interest payments on investment loans are tax deductible. The tax deductions you can potentially claim on a property investment include interest on the investment loan, council rates, and home insurance.

Everyone wants to secure the best investment home loan at a low rate. But the right investment loan for you will depend on your financial circumstances including your borrowing power, the size of deposit you can afford, the kind of features you need, and how long you think it will take you to repay the loan.

Securing an investment home loan at a low rate shouldn’t be the only thing you look for. You also need to consider ongoing and upfront fees. Associated fees when added up can cost thousands of dollars, which is why you should look at the interest rates and fees together when comparing home loans. One way to get a quick understanding is by checking out the comparison rate instead of the advertised rate.

Another thing you should consider other than low interest rates is the home loan features. Features can add flexibility to your investment loan. They include the ability to make additional repayments and having an offset account. Here are some of the features you should look out for:

  • Interest-only payments: This feature allows you to pay only the interest amount of the loan instead of paying both the principal and the interest. While it might take a longer time to repay the loan, you could potentially save a lot of money during the interest-only period.
  • Split loans: A fixed rate and a variable rate loan are the usual home loan types you can choose from. A split loan allows you to take advantage of both loan types, so you can get the flexibility of the variable rate, and also reduce the loan repayments when your interest rate increases.  
  • Line of credit facility: With a line of credit facility, you can easily access your funds at any time when you need them for things like repairs and home maintenance as long as you make timely regular repayments.
  • Redraw Facility: If you have made extra repayments on your investment home loan, you can take out the funds or the extra payments you made when you need them.

Consider the type of investment loan you’ll sign up for when looking for the best investment home loan. You can also use our home loan calculator to see an estimate of what your repayments will likely be, so you can calculate how much your cash flow will be. 

Recommended reading

Things to consider when refinancing

When was the last time you checked to see if your investment property loan is still competitive?

VIEW ARTICLE

Paperwork required to refinance a loan

When you refinance a loan there are only a handful of documents that you need and they are freely available to any potential borrower.

VIEW ARTICLE