SUITABLE HOME LOANS
Investing in Property
Suitable Loans for Investing
Whether you are a first time investor or have a portfolio of properties, a Suitable Loans Mortgage Broker can help with choosing a loan to suit your investment scenario.
Home Loan Calculator
Our Mortgage Calculator and Home Loan Calculators can give you an estimate of how much can I borrow and what will my repayments be.
We have broad Expertise
Unique to Suitable Loans we have hands on residential building and construction industry experience. We understand the practical details of your investment property.
We're your trusted Advisor
You have our team behind you to support you through the Investment Home Loan process and beyond. We're paid by the lender, not by you. We negotiate with lenders and look after your best interests.
Using Equity to buy your Investment property
- Equity is the difference between the value of your property and how much you owe on it
- Let's say your home is worth $500,000 and you still owe $150,000, your equity is $350,000
- Usable equity is usually 80% of the value of your home less the debt you still owe against it
- Usable equity is typically not 100% because if house prices fall the loan will be more than the value of your property!
- Let's say 80% of $500,000 = $400,000 minus your mortgage $150,000 = $250,000 usable equity
- Equity in your home could be an option for an investment property particularly to help with a deposit for the purchase
Principal and Interest vs. Interest only
- With a Principal and Interest loan your repayments include both the principal amount and interest accrued
- Initially you'll pay mostly interest and then over time more of your principal
- With interest only you pay interest and defer your principal payments for a period of time
- Your Accountant can provide advice on tax-deductable interest payments
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- Advantages of a Principal and Interest Loan:
- Interest rates are usually lower than an interest only loan
- You will pay less interest over the life of the loan
- Quicker ownership because you will pay the loan off faster
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- Disadvantages of a Principal and Interest Loan:
- Repayments are higher than an interest only loan
- May not be the most tax effective option for an investment
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- Advantages of an Interest only Loan:
- Potential tax benefits for an investment property
- Lower payment for the interest only period
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- Disadvantages of an Interest only Loan:
- Interest rates are higher during the interest only period
- Repayments will be higher after the interest only period
- More interest payable over the life of the loan
- Principal amount will not reduce during the interest only period
