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Investor's Strategy On I/O Vs P/I Repayments

Recently, most lenders have increased interest rates (for investment lending) as a way of recouping lost profits for having to retain more capital against their loan book. This was an order by the regulator APRA. If you want to borrow money for investment purposes, you’re paying a price for it. At the present time it’s costing you anywhere between 27 to 50 basis points higher if borrowing for investment purposes. The great news is that there are lenders who are pricing investment lending and owner-occupier lending on par, providing the repayments are set on a P&I basis. Most investors choose I/O repayments, which makes sense as the idea is to pay off your home loan (non tax-deductible debt

7 Key Elements of Refinancing

We are currently seeing an increased activity in refinance queries which is understandable given the amount of current special offers by home loan lenders, particularly for owner-occupier purposes. If you’ve only taken out a home loan in the past couple of years, refinancing is probably far from your mind right now. Most people have a set-and-forget attitude to their home loan, which is not ideal and can cost you. If you take out a home loan and leave it unchanged for its entire term, this may result in substantial extra interest that you’ll pay to the bank, plus you’ll miss out on opportunities to make money by not utilising the equity you have built up in your property. Here are 7 reasons

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