Investment Loans

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Investments in new property can be an important strategy for accumulating wealth over a long period. Therefore, securing the most appropriate loan is very crucial to increase the potential of your investment.

In Australia, it is very essential to understand the available investment loan options before seeking it in a country like Australia. These investment loan options are primarily of two kinds:

  • Principal and Interest Loans : With this option, you will be required to pay both the principal & interest portions of your investment loan on a monthly basis, thus, you are gradually reducing the total amount which is owed over the time period.
  • Interest-Only Loans : Unlike the above kind of investment loan, these loans necessitate paying for only the interest portion on your loan on a monthly basis. The principal amount in such kind of loans remains pending until the end of the term of loan.

 

Thus, understanding the key differences between the above different kinds of loans is vital in aligning the strategy for investment with your key financial goals.

To choose between different loans, it is important to consider your unique requirements and circumstances. Opting for a principal and interest loan can expedite an equity building in your property, while an interest-only loan may minimize the repayments being made on a monthly basis. Once you have determined suitable loan preference, it is imperative to compare the existing interest rates across various loan lenders. Please note that the interest rate is an important criterion as it can significantly influence your monthly repayments. These rate comparisons can be either made online or with help of an expert mortgage broker in this field, who apart from aiding you in suitable loan selection, can also help in negotiating for competitive interest rates on your behalf.

Beyond these interest rates, several other factors also warrant consideration during selection of an investment loan, which include:

  • Loan to Value Ratio: Also, known as LVR, signifies the % age of property’s value for which the money is being borrowed from the lender. A lower value of LVR implies lower interest rate.
  • Upfront Fees : The upfront expenses such as application fees, evaluation fees, etc. need to be considered as well. Do this while evaluating & finalising the type of investment loan required.
  • Term of Repayment : Certainly, as the name signifies, it is the actual period of time for which the loan amount will be repaid. The longer term will yield lower monthly payments but will entail high interest costs on an overall basis.

 

Navigating through various investment loan options requires informed decision making through proper research and suitable consideration of individual circumstances.

Here are some of the tips for securing the best investment loans:

  • Conduct Research : Scrutinize the interest rates across various lenders while accounting for your unique circumstances.
  • Obtain Pre-Approval : Pre-approval helps to provide suitable insights into the borrowing limits and the anticipated interest rates.
  • Compare Shops : Always explore offerings from the multiple lenders to ascertain the most advantageous terms and get the best deal.
  • Hire a Mortgage Broker : The expertise of an experienced mortgage broker may be leveraged to streamline various comparisons and identification of the optimal investment loan suited to your needs.

Loan Process

The investment loan solutions at Loan Junction follow a systematic and streamlined process. This helps us keep everything on track and make sure they’re disciplined as it’s the key that drives us forward.

Contact our dedicated lending specialist

01

Send your documents

02

We provide you with options.

03

Aprroval

04

Settlement

05

Investment Loan types and features.

There are diverse range of investment loan options available to you. The common ones include variable rate investment loans, fixed rate investment loans, packaged loans and more. Have a look at the top three options that are mostly availed by the people. Speak to us in case you need more information.

Variable Rate Loan

With a variable rate of interest for your investment loan, the interest rate can vary during the life of loan. It gives you flexibility but can also mean higher rates later on. These loans let you make extra payments whenever you want, and they come with features like redraw and offset accounts.

Fixed rate loan

Fixed Rate loans do not give the flexibility to change the rate of interest of your investment loan. Here the interest rate of your loan and repayments will remain the same during the fixed term, no matter what.

Split loan

This investment loan options gives you an opportunity to split the loan. Here, you’re allowed to fix a certain part of the loan. The remaining will be variable.

FAQ

While buying a property you must be aware of several fees. These are not discussed at length and detail while buying a property. These fees include building inspections fees, mortgage registration fee, transfer fees, stamp duty and pest fee. Make sure to talk to your investment loan company to know more about these hidden fees.
Absolutely! You can use the value of your home to buy another property for investing. Instead of using your savings, you can use this value for things like a down payment, fixing up the new place, or getting a loan.
To find the best loan option, first understand your priorities and goals, whether you want to make money regularly or want to grow your investment over time. Work over and decide what kind of interest rate suits you- fixed, variable or split. Also, explore different lenders because they offer various loan choices.