When you're thinking about buying an investment property in Rockingham, understanding investment loan features can make all the difference to your property investment strategy. Whether you're eyeing a town house near the beach or an apartment close to the shopping centre, knowing what lenders offer will help you make informed decisions about your first investment property or expanding your investment property portfolio.
Understanding Investment Loan Interest Rates
One of the most important features to consider when applying for an investment loan is the interest rate structure. You'll typically have two main options:
• Variable interest rate: This fluctuates with market conditions and can offer flexibility
• Fixed interest rate: Provides certainty for your repayments over a set period
Many lenders also offer interest rate discounts for investment properties, particularly if you have a strong borrowing capacity or are purchasing multiple properties. The Investment Loan Interest Rate you secure will directly impact your rental yield calculations and overall property investment returns.
Loan to Value Ratio and Deposit Requirements
The loan to value ratio (LVR) is crucial when buying a rental property. Most lenders will finance up to 80% of the property value for investment loans, meaning you'll need at least a 20% deposit. If you borrow above this threshold, you'll likely need to pay lenders mortgage insurance (LMI), which protects the lender but adds to your costs.
For a stand alone dwelling in Rockingham valued at $500,000, here's how LVR works:
• 80% LVR = $400,000 loan amount, $100,000 deposit
• 90% LVR = $450,000 loan amount, $50,000 deposit plus LMI
Investment Loan Application Process
The investment loan application involves several key steps that differ from owner-occupier loans. When you invest in real estate, lenders will assess:
- Your current income and expenses
- Bank statements from recent months
- Details about the property you want to purchase
- Your overall investment property portfolio
- Your ability to service the loan if rental income stops
The streamlined application process offered by many lenders can help speed things up, but you'll still need to research property values and rental yields thoroughly.
Additional Costs and Features
When buying an investment property, several additional costs come into play beyond the loan amount:
• Stamp duty: Varies by state and property value
• Legal and inspection fees
• Property management costs
• Insurance premiums
Many investment loan options include features like:
• Offset accounts to reduce interest charges
• Redraw facilities for accessing extra repayments
• Interest-only payment periods
• Portfolio lending for multiple properties
Calculating Investment Loan Repayments
Calculating investment loan repayments involves more than just principal and interest. You'll need to consider:
• The rental income the property will generate
• Whether you'll claim negative gearing benefits
• How the property fits into your broader investment strategy
• Potential capital growth in the property market
Accessing Investment Loan Options
At G&T Finance, we can help you access investment loan options from banks and lenders across Australia. This means you're not limited to just one or two products – we can compare features, rates, and terms to find what works for your situation.
Whether you're looking at your first investment property or building a larger portfolio, understanding these loan features will help you make confident decisions about your property investment journey.
Call one of our team or book an appointment at a time that works for you to discuss your investment loan needs and explore the options available in today's market.
