Interest-only residential home loans are residential mortgages where your monthly repayments are composed of only the interest that is charged by your lender.
They vary in difference compared to the traditional amortising loans, where monthly repayments are made up of both principal and interest. When both the principal and interest are paid, your loan balance is reduced during your loan term. Since interest is determined by the outstanding balance of your residential home loan, the specified amount of interest that you will be expected to pay will, in turn, also reduce.
On the other hand, when it comes to an interest-only loan, your loan balance during your loan term will not reduce due to the fact that your repayments will only cover the interest on the amount you have borrowed. Your loan balance is not reducing, and hence you will end up paying an increased amount of interest over the period of your loan.
If you are unsure if interest-only residential property loans are the right fit for you, we have outlined a few of the benefits that come along with an interest-only residential loan.
Very Suitable For Construction Loans & Valued-Added Projects
In the instance that an investor is constructing a property, there is a requirement to try and preserve as much cash as you can during the construction phase of the project. Correspondingly, a general construction loan contains a pre-funded interest reserve account from which interest-only repayments are withdrawn whilst the property is under construction. When the property has been built and has been tenanted, the payments of your loan change from interest-only to principal and interest in order to line up with the property’s enhanced income.
This notion is very similar when it comes to value-added projects. Investors have elevated upfront costs to renovate a property, and there is a necessity to utilise their capital for this purpose. Obtaining an interest-only loan is very beneficial for an investor as they are able to conserve their capital until the renovations are completed, and the property is capable enough to produce enough income to gradually write off the initial cost of the loan.
Stabilises & Advances Your Cash Flow
Prospering property investment is all about cash flow. Utilising an interest-only loan can enable you to be more in control of your cash flow over the period of your loan term. To make the most out of the compounding and leverage of your investment property, you need to hold your investment properties for an extended amount of time. Therefore, the only way to do this is by creating financial buffers or cash flow.
Interest-only home loan repayments allow you to pay the merest amount demanded by your loan. This then provides you with extra money in your pocket to pay for any added expenses such as council rates or repairs.
Allows You To Prioritise Your Debt Allocation
Interest-only loans for the purchasing of residential properties are very beneficial as it provides you with the ability to pay off your debt. Interest-only repayments indicate that you are servicing your loan whilst your property advances in value. Furthermore, these interest-only repayments are also deductible from your income, ultimately reducing your tax.
In the meantime, with an interest-only residential loan, you have the ability to pay off any non-deductible debt, such as your credit cards or your car. Paying these debts off should be a priority.
Use Of Offset Accounts Reduce Your Interest-Only Repayments Even Further
An offset account is a simple transaction account that enables you to utilise your surplus cash in order to offset against the interest applicable to your loan. They work by providing you with the ability to transfer any additional savings that you have into an account that is then linked towards your mortgage. This extra cash is used to counteract your mortgage and hence minimises your interest repayment amount.
Proves To Be Very Tax Effective
In Australia, it is acceptable for all investors to claim back any costs that are linked with owning assets, and this does involve interest on residential investment property loans. In regards to property investors, the interest element of their residential property loans is added to the annual costs of retaining a real estate investment. Needless to say, this is offset by the income that is obtained through rent.
Making use of interest-only residential home loans makes it effortless to determine what your annual repayments are.
Reach out to Greenline Home Loans today!
If you have been considering buying your first home, buying a residential property or wanting an interest-only residential home loan, get in touch with our team of experienced brokers at Greenline Home Loans. We have access to 50 lenders and a strong relationship with several major banks to assist you and offer a solution to suit your needs.
At Greenline Home Loans, we will tailor the best solution for your needs and walk with you hand in hand from the first day you consider a construction loan or small business loan. Contact our friendly team of brokers to speak about low-rate home loans on 1800 705 505 to get started today!
In the past year, property prices across Australia increased dramatically by 23.4%. Those buyers who are on a tight budget are particularly longing to uncover a real estate bargain.
In New South Wales, one of the cheapest areas happens to be Mannering Park, located on the state’s central coast, where the median house price is set at $614,000. Proven that it has a direct position on Lake Macquarie with numerous recreational activities available in its surrounds, Mannering Park is a holiday hotspot at its finest. With a thriving population, great schools, and close proximity to the M1, this location is perfect for those who are searching for a change of scenery and is a good chance for those first home buyers wishing to step foot in the market or for those who wish to retire in an amazing waterfront location.
The cheapest metropolitan suburb overall within NSW is that of Emerton, located in Sydney’s West, with a median house price of $580,000. Other areas in close proximity in the Blacktown region with low median house prices are Lethbridge Park ($602,500), Blackett ($605,000), Tregear ($607,500) and Bidwill ($608,750).
Among the cheapest metropolitan suburbs for units within NSW happens to be Warwick Farm, with a median house price of $358,000, followed by Wiley Park, with a median price of $378,000.
Moving along to Melbourne, the cheapest metro suburb to purchase a house in was Millgrove, located in the city’s outer east, with a median house price of $531,000. With a very friendly neighbourhood, access to the river, mountain bike tracks, great supermarkets and dining options, Millgrove has so much to offer.
The suburb of Melton, in the city’s west, was Victoria’s cheapest suburb for houses overall, with a median price of $450,000, followed by Kurunjang ($486,000), Melton South ($500,000) and Coolaroo ($500,000).
The cheapest metropolitan area for units overall is the suburb of Albion, in Melbourne’s west, with a median unit price of $285,000, followed by Melton South ($321,250) and Melton ($346,00).
When it comes to South Australia’s list of cheapest suburbs, Elizabeth North has a median price of only $209,000. Elizabeth North is described as a hidden treasure, particularly for first home buyers and savvy investors.
Salisbury was noted as South Australia’s cheapest suburb for units, with a median unit price of $255,000.
Moving down to Tasmania, the Australian state with the cheapest suburb for houses, Bridgewater documented a median house price of $377,875. With good amenities such as shopping and parks to a popular private school nearby, the demand for houses within Bridgewater has continuously increased. The area has become more and more popular.
Hobart’s suburb of Claremont ranked the state’s cheapest for units, with a median price of $403,500.
Transitioning to booming Queensland, there have been no major Brisbane suburbs on the state’s list for the cheapest areas for a house. Russell Island, located southeast of Brisbane, comes in on top with a median house price of $255,000, followed by Laidley ($271,500) and Riverview ($300,000).
In regards to units, some of the lowest metro area median prices in the Sunshine State were Woodrige ($181,158), Goodna ($221,000) and Brassall ($240,000).
Reach out to Greenline Home Loans today!
If you have been considering buying your first home, buying a residential property or wanting a residential investment property loan and are looking for the best home loans, get in touch with our team of experienced brokers at Greenline Home Loans. We have access to 50 lenders and a strong relationship with several major banks to assist you and offer a solution to suit your needs.
At Greenline Home Loans, we will tailor the best solution for your needs and walk with you hand in hand from the first day you consider purchasing an investment property with your super. Contact our friendly team of brokers to speak about low rate home loans on 1800 705 505 to get started today!
At Greenline Home Loans, our aim is to provide the best home loans with the best home loan rates to suit people with various needs. We offer which include residential home loans, residential investment property loans, home loan refinancing, debt consolidation, bridging loans, construction loans and cash out equity release.
Below are some of the best home loans we offer at Greenline Home Loans and the features they offer:
Residential home loans
Applying for a residential home loan can be overwhelming and difficult to understand, that’s why our experienced team at Greenline Home Loans can provide you with all relevant information and assist you in the application process to ensure you have access to the best home loans.
We aim to provide low rate home loans, low fees and increased flexibility to suit your needs and requirements. Our professional brokers have extensive knowledge of Australian residential home loan markets! Get in contact with our friendly team at Greenline for assistance with a residential home loan.
Residential investment property loans
Residential investment property loans are a great option if you are looking to purchase an investment property, or you are looking to expand on the market as an experienced investor! At Greenline Home Loans, we offer low rate home loan options for residential investment property loans along, which have beneficial features such as the loan process being hassle free and convenient as well as having access to cost effective options.
Home loan refinancing
There are several reasons why you may want to refinance your home loans such as debt consolidation, a change in your personal circumstances, wanting to release equity from your property and more. Our home loan refinancing options provide a number of features which include equity access, lower interest rates, flexibility and the ability to reduce the length of your loan.
Our advisers at Greenline Home Loans can assist you with home loan refinancing by customising solutions to fit your requirements and needs with options such as interest-only loan terms, a combination of fixed and variable loans, offset and redraw facilities and guaranteed loans.
Debt consolidation
Debt consolidation will combine all your debts into a single loan or one credit card amount, which may make this a beneficial option if you have been managing multiple loans or credit cards and you are wanting to consolidate them. Debt consolidation will leave you with one loan which means you will now only have one repayment cycle. There are many product features of our debt consolidation at Greenline Home Loans which include a reduction in your costs which will maintain your debts, an improvement in your credit score, a fixed end date and simplified repayments.
If you are wanting to consolidate your debts into a single loan, manage your debt, easily track your repayments, save on loan fees, and interest rates, our team at Greenline Home Loans can assist you!
Bridging loans
A bridging loan can ensure you have time to sell an existing property when purchasing a new home, without the added stress of having to line up, and time settlement dates. There are many features of a bridging loan which include utilising flexible lending criteria, being fast to arrange, utilisation of an interest-only bridging loan and being convenient.
Our team at Greenline can provide you with the lowest bridging loan rates and answer any questions you may have about the loan approval process.
Construction loans
A construction loan is commonly referred to as a drawn-down loan, as the loan is drawn down progressively to pay for each stage of the construction process. Generally, for the first 12 months of the loan the loan is based on an interest only basis, then the loan will generally revert to principal and interest payments. A major benefit of a construction loan for many people is the advantage of managing your cash flow effectively throughout the building stages.
A construction loan generally contains 5 stages which trigger the progression of the draw down. The 5 stages include slab down or the base, frame stage, lockup, fixing and completion. Get in contact with our experienced team at Greenline Home Loans who can assist you with any further questions about the process or information regarding construction loans.
Cash out – equity release
A cash out/equity release may be the best option if you are looking to meet some personal goals such as renovating your home. One of the main benefits of owning your home is being able to have access to the equity in your property and use it as collateral when you are looking to make home improvements such as renovations.
The features of a cash out equity release include prolonged repayment terms, a possibility of tax-deductible interest, lower interest rates and fixed interest.
Reach out to Greenline Home Loans today!
If you have been considering buying your first home, buying a residential property or wanting a residential investment property loan and are looking for the best home loans, get in touch with our team of experienced brokers at Greenline Home Loans. We have access to 50 lenders and a strong relationship with several major banks to assist you and offer a solution to suit your needs.
At Greenline Home Loans we will tailor the best solution for your needs and walk with you hand in hand from the first day you consider a residential home through to the option of home loan refinancing. Contact our friendly team of brokers to speak about low rate home loans on 1800 705 505 to get started today!