Are you looking for an Investment Loan?
A variety of lenders offer investment loans but they may not all fit your specific investment goals and risk profile. By gearing your portfolio with the right loans you can maximise your borrowing capacity, extend your interest only periods and reduce the size of your deposits. This means that you can make more investments and achieve your investment goals faster!
Don’t pay more than you have to!
It hasn’t been a great time for investors needing a mortgage. This is mainly due to the cap on the total amount of money that can be lent to investors that the Australian Prudential Regulation Authority (APRA) set. Companies have had to tighten their lending policy for investors and, as a result, the interest rates have been raised, particularly for fixed rate investment loans.
It is difficult to find consistency when it comes to interest rates. There are some lenders that charge more for one product while others charge less. If you have a home loan, you may be able to get amazing investment loan discounts by going with the same lender. If you don’t have a home loan or you’re planning to go with another lender, you’ll need to go for one that can offer competitive pricing to investors.
You’ll have to shop around thoroughly but your mortgage broker can help you with this.
How to avoid being overcharged
You may not realise that you’re being overcharged! Lenders have different sneaky ways to ramp up your interest rate so you need to be vigilant. The key to avoid being overcharged is to regularly review your rate. If your investment loan is more than two years old, it’s time to consider refinancing. Some of the pricing on older investment loans aren’t competitive at all. Although you’ll be saving with an interest discount, you’ll often be paying more in annual fees with a professional package.
Should I fix my investment loan?
Fixed rate investment loans have high exit fees or break fees that don’t allow you to make large extra repayment. If you fix your interest rate, it’s similar to having a binding contract, which can cost you a small fortune if you break it.
You may be better off on a variable rate on your investment loan if you’re planning on:
- Selling your investment property.
- Making a large lump sum repayment or large amounts in extra repayments.
- Refinancing your investment loan.
However, if you’re planning on making extra repayments, you may want to get a flexible fixed rate investment loan instead.
Note that this won’t help if you’re selling or refinancing because you’d still be liable to pay large exit fees.
Get the experts on your side!
At Quick Lending Solutions, we specialise in fixed rate investment loans. We know the policies of many prime as well as non-bank lenders all over Australia and can help you select the right lender for your situation.