If you're ready to invest in property, you know you've got a lot of decisions ahead. It's easy to focus on the actual property hunt and leave the search for a loan to the last minute. But it's equally important to understand the world of investment loans and find the right one for you. We can help you try to understand the investment property loan options today.
Before you commit to a loan for your investment property, take some time to understand the lingo. If you're not clear on these terms, follow these links for an overview:
It's also a good idea to start comparing home loan offers and rates early, being aware that investment property interest rates are often different than the interest rates on your home loan.
Investment property loans have many similar elements to loans designed for a property you'd buy to live in. However, finer details, including the rates of investment loans, can vary.
You need to consider the following factors:
Taking out investment home loans with fixed interest gives you certainty, which can be a benefit, especially to new property investors. With fixed rate loans, if there is an interest rate increase or decrease, it will not apply during the fixed rate term. The set repayments with a fixed rate loan means that investors can budget for out of pocket expenses or monthly investment surplus.
Variable interest rates on the other hand allow you to benefit if rates fall during the life of your loan. However, if variable interest rates rise, this would result in an increase in your repayments. Many banks also allow you to make additional payments to your variable rate loan, meaning you could pay off your loan sooner. With fixed rate loans, there are sometimes limits to how much extra you can repay on the loan per year and additional costs such as break costs may apply.
Find out what rates are available on investment loans by clicking here.
We can help you open up a world of opportunities to build wealth through property investment. We offer specific investment property features, so you can find the loan that suits your circumstances.
Talk to one of our Home Loan Managers today to help you find the right loan to suit your needs.
Step 1. Research and strategy
When investing in property, you need to be led by your head rather than heart. It's vital that you are clear on your aims and strategies for your property investment, have spoken with your accountant or advisor, and have researched loan options.
Step 2. Apply and be approved
If you're an existing HSBC Australia customer, simply log on to your online banking and enquire about an investor loan. If you're new to HSBC Australia, complete this online enquiry form and we will call you to discuss your options. You'll need to provide identification and your personal and financial information for your application to be assessed.
Step 3. Manage and review
Investment is rarely a "set and forget" proposition. Review your finances and strategy regularly and ensure your rental processes are well-managed and effective.
This article is intended to provide general information of an educational nature only. This information should not be relied upon as financial product advice as it does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of the information to your own circumstances and seek independent legal and financial advice prior to making any investment choice. There are risks associated with any investment and this document is not intended to list all of them in respect to any particular investment opportunity. Prices, levels and indications contained in this document are illustrative only and may not represent future performance. HSBC does not warrant or represent the performance of any investment opportunity.