Investment Loans

The same products are available for Investment loans as for Home loans although interest rates are usually higher; however there are additional options that may be suitable. These are:

Interest only repayments: Rather than reducing the principle loan amount, many investment borrowers choose to pay interest only for a number of years. This is helpful in reducing the cost of the investment whilst maximising the tax deductibility. It is also the preferred option when you still have personal debt (home loan etc) as it enables you to put any extra funds into the repayment of that debt rather than the investment.

Interest only in advance: This is only available on fixed rate investment loans. It enables a borrower to claim a larger deduction in the current financial year by pre-paying the interest for the following financial year, particularly when the property is purchase late in the financial year. Of course you need to have the available cash to do this.

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