Investment Loans



For borrowers who wish to purchase an investment property, the choice of home loan can be crucial.

Investment properties include residential properties with rental income, holiday homes with rental potential, and property with tax benefits.

Rooster Mortgages can give you more details about the types of investment properties you could consider.

Types of loans that suit investment properties include:

1. Equity home loans, which enable you to borrow against any equity accumulated in your current property
2. Interest only home loans, whereby your repayments cover the interest component
3. Standard variable or fixed rate home loans, many of which allow you to borrow up to 95% of the property value.

Property is usually considered as a long term investment. Growth can be created either from a rental income, increasing property prices, or tax benefits.

Advantages:

* Long term investment which is fairly secure
* It can provide you with a valuable asset that can be used to secure other assets
* A good rental income often means the property ‘pays for itself’
* Tax benefits through gearing

Risks:

* Purchase costs can be significant when you include loan establishment fees, legal costs and stamp duty.
* There can be on-going costs such as maintenance and insurance
* The value of the property may not increase at the anticipated rate
* Rental income cannot always be guaranteed

Investment home loans are designed for borrowers wishing to purchase property as a long term investment. They are a great option if you already have a property or a deposit, and can make regular repayments.