Choosing an investment loan can be a daunting experience. There are endless options and mountains of information out there, so how can you be sure that you’re getting the best deal for your situation?
Let’s have a quick look at the options.
Fixed loans
- Your interest rate remains the same over the life of your loan
- Budgeting is made easy as your outgoing costs are the same each month
- Fixed loans don’t offer the breadth of features variable rates do, and you won’t be able to make extra repayments to decrease your loan balance when times are good.
Variable loans
- Your interest rate changes as the Reserve Bank adjusts to economic conditions.
- Variable rates are useful if you’re not worried about fluctuating repayments and want to take advantage of lulls in the economy.
There’s plenty of add-ons and benefits of a home loan that you can use to your advantage, including:
- Interest only repayments this helps cover unexpected expenses or negative cash flow strategies
- Offset accounts let you hold savings in a separate account to credit towards your loan balance which you can access without penalties
- Additional repayments/ redraw means you can use any extra savings on your loan to decrease the balance now and access them later, if needed
- Loan splits allows you to split a portion of your loan between variable and fixed interest rates to reduce the risk of repayment blow out
If you’d like more information on what lenders are currently offering and how you can choose the best deal for you reach out and let’s talk.
My Very Best To You Always,
