When it comes to making the most of an investment property, finding the right home in the right location is only half the battle; finding the best finance is the other half.  Many options are available and the choice of home loan will ultimately depend on your particular investment strategy and the type of property.

Here are three of the main choices:

1. Standard variable rate or fixed rate home loan

   The standard variable home loan is the product that most financial institutions would consider to be their 'main stream' home loan.  It offers greatest flexibility and can also be combined with other products to form a split or combination loan, where one portion is fixed and the other portion is variable. The benefits of having a standard variable portion is that they can offer many attractive features such as 100% off-set accounts, top ups, redraw facilities, salary crediting and construction loans, plus the ability to change it to a fixed rate if you so desire.
   

    

   
   

2. Interest only home loan

   With an interest only home loan, repayments only cover the interest component. The principal is repaid in full at the end of the loan term (usually three to five years).  Because borrowers only repay the interest component, interest only loans have lower repayments than principal and interest loans.
   
   

3. Line of Credit Facility

   A Line of Credit, or Equity Loan as it is also known, is very popular for those borrowers that require funds for future use in investments, home renovations or wealth creation programs.  The beauty of these types of loans is that your repayments are calculated on the portion of the money you are using, which means your repayments are reduced if you are only using a small portion of your Line of Credit.  This product is similar in principle to a low interest rate credit card.  It allows the borrower to access any repaid funds up to the original loan amount.  Borrowers can choose to repay the interest only, or they can make principal payments also.  Due to the nature of this facility, the borrower needs to use the same discipline as they would when using a credit card.
   

Additional loan features that may offer tax benefits or help you pay off your investment loan sooner include:

• Interest in advance home loan enables eligible borrowers to create a tax deduction by paying next years’ interest in the current financial year.
  

• Mortgage Offset Account Allows you to use savings and interest earned on savings to pay off the loan principal.
  

Please feel free to contact one of our friendly, professional Loan Consultants to discuss your loan requirements or make an appointment.  If you prefer, simply complete our online application form and a Consultant will contact you.

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