Choosing the right investment home loan
Although there is very little difference between home loans for private residences and investment properties, you are likely to want different features and repayment options from your investment home loan.
When comparing home loans for your investment property, consider these important factors.
With a Viridian Line of Credit Home Loan, you can draw down on the loan to access additional funds whenever you like. This is useful for maintaining cash flow when maintenance or repairs are required on your investment property. You can also tap into existing equity to make additional investments without having to apply for a new home loan.
Interest only means your repayments only cover the interest for a set period of time—they won’t reduce the principal amount owing. This option is ideal for investors who are also paying off their own home loan, as repayments are lower and can be claimed as a tax deduction.
Once you start paying principal and interest, only the interest on your investment home loan can be claimed as a tax deduction. However, in some cases you can choose to pay interest annually in advance, to help reduce your taxable income (only available on Fixed Rate Home Loans).
Do you have access to additional funds to pay for urgent repairs, or cover the mortgage repayment on your investment home loan if the property is unoccupied? Features like redraw facilities, a loan top up or a mortgage offset account may give you access to emergency funds when you need it.
The Commonwealth Bank Mortgage Interest Saver Account (MISA) is a feature linked to eligible home loans. When the balance of your MISA exceeds $1000, it’s offset against the balance of your home loan, which can potentially save you thousands in interest and cut years from your loan term.
Alternatively, an Everyday Offset allows you to link accounts to your home loan and not pay any interest on part of your home loan balance, equal to the balance of that account. Offset facilities are not available on all loans.
Home loan rates and fees
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Applications are subject to credit approval. Full terms and conditions are included in the Loan Offer. Other fees and charges are payable. As this advice has been prepared without considering your objectives, financial situation or needs, you should before acting on this advice, consider its appropriateness to your circumstances. Terms and conditions for the transaction and savings accounts mentioned are available on request. If you have a complaint, the Bank’s dispute resolution process can be accessed on 13 2221.