If you have an investment property, it is important to ensure that your investment loan remains competitive. If you have an interest-only loan, set yourself a reminder three months prior to the expiry date so you have time to decide your next step. Apart from letting your loan revert to principal and interest repayments, there are other options available to you when the interest-only period expires.
We recently helped one of our clients refinance the remainder of their loan after the interest-only period was expired and saved them $20,000 in the process!
What was the situation?
Our client’s interest-only loan was due to expire and rather than simply let the loan revert to principal and interest repayments, they wanted to do a full review of their investment loan. Due to the current low interest-rate market, they wanted to see if there was a loan product in the market with a better interest rate and with competitive features compared with their existing loan.
Our client reached out to Launch Finance as they had a busy schedule with work and knew that we would be able to find the right solution for them. After reviewing our client’s current financial position and goals, we recommended finance with a new lender that was able to offer our client a lower interest rate and provide a refinance rebate of $4,000.
What were the benefits?
By refinancing to the new loan, our client will save approximately $20,000 over interest-only term by refinancing plus the $4,000 rebate. They were happy they didn’t have to stress over the transition and that they could focus on their personal priorities.
This is a common example for investors who have opted for interest-only loans for the first few years of the loan. Interest-only loans have their advantages but you need to be prepared for when the repayments revert to principal and interest.
Get in contact with one of our brokers to ‘Review Your Finances’ today on (08) 9367 4222, [email protected] or fill out the form on this page to arrange an appointment and we can let you know your options!