The structure of your loan is important when it comes to investing in property. Understanding the differences and benefits associated with choosing an interest only loan versus a principal and interest loan as well as what variable and fixed interest rates are available to you will make a difference to how your investment performs. Offset facilities can also be useful in your investment journey, ensuring your account balance offsets your interest and also giving you the ability to draw down on the loan to make improvements to the property or to invest in an additional property purchase.
Regarding interest rates, our clients often find it worthwhile to start with an interest only loan for their investment property, usually available for up to five years. This gives them a chance to see how their investment performs, taking into account the income and expenses associated with owning the property. After this period, if the investment is going well, moving to a principal and interest loan may be worthwhile in order to pay the loan off sooner.
We’ve also found that when there’s trusts and companies involved in purchasing investment properties it’s beneficial for us to work with your financial advisor and/or accountant to ensure we choose a loan structure for your investment that will not only be beneficial for now, but for your entire portfolio if you decide to continue to invest in property in the future. If you’re looking to build wealth through investment property ownership, which can greatly assist in your future retirement plans, get in touch with our residential broking team and they’ll investigate finance options for you.
To contact our residential lending team, email Head of Client Relations, Edwina Leota on edwina.leota@growthpointcapital.com.au
Our content is prepared and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. We recommend you consider whether it is appropriate to your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. All information pertaining to loans are subject to lenders terms and conditions and fees and charges and eligibility criteria apply.