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Investment property loan options

Finding the ideal home loan rate for you

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. 

Understanding property investment loan language

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.

Your property investment loan options

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: 

  • Principal and interest versus interest-only loans
    An interest-only loan allows you to pay the interest only and not pay down the principal loan amount. These loans often carry a higher interest rate compared to principal and interest loans. They also carry more risk as you're not repaying the amount you borrowed, therefore not reducing your loan like you would with a principal and interest loan. This also means that your repayments would be higher once the interest only period ends. Most interest only loans also revert to principal and interest after a set time.
  • Variable interest versus fixed interest rates

    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. 

  • Offset account
    Another feature of a variable rate loan is the capacity for an offset account. An offset account allows for the amount in your savings to offset the interest you're paying on your loan. Offset accounts feature in our Standard Variable Loan. For example, our Standard Variable Loan with an offset account offers the options of a principal and interest loan or an interest-only option. For more information enquire online or talk to one of our friendly home loan managers on 1300 694 722.

Find out what rates are available on investment loans by clicking here.

Why choose HSBC for your investment?

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.

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How to invest in property with HSBC in 3 simple steps

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.

Ready to apply?

Invest in the right home loan by enquiring online or talking to our friendly home loan managers on 1300 694 722.

Important information

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. 

Credit provided by HSBC Bank Australia Limited ABN 48 006 434 162. Australian Credit Licence/AFSL 232595. Home Loan Terms, Personal Banking Booklet, fees and charges and lending criteria apply.

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