Interest Management Loans

Cash flow management loans
If you are a property investor looking at an alternative to negative gearing then you may want to consider cash flow management loans. Also known as Capitaliser structured lines of credit these loans allow you to use your rental income as your mortgage repayment and capitalise any balance owing to the principle. If your Loan to Value Ratio (LVR) is high, you can usually use a residential or mixed residential and commercial. Some of the loan features available with this type of product include redraw, portability, split accounts, and interest retention for loan sizes from $250,000 to $5,000,000 per security.

Interest in advance
Investors often choose the interest in advance option because of the possibility of earning a discount on their interest rate as well as the ability to claim the costs against their tax earlier.

Interest in advance loans are usually available on fixed rate loans with a loan term of around 1 to 5 years (depending on your lender). The interest in advance option works by allowing you to pay the interest that will accumulate on your loan over the next year before it is actually charged. The lender may the offer a discount on the interest rate, and because you are paying your interest in advance, you are able to claim the costs against your tax earlier.

This option is only suitable for those who can afford to pat the loan interest in a lump sum.

Interest only fixed rate home loan
Interest only loans suit investors who are focused on achieving capital growth, and often go hand-in-hand with negative gearing.

With an interest only option on a fixed rate home loan, you will usually have lower repayments than a principal and interest loan. The fixed rate will usually have a loan term of 1 to 5 years, after which you will need to renegotiate or pay out the loan.

Interest only variable rate home loan
Interest only variable rate home loans are very similar to fixed rate home loans with an interest only option. The only difference is that your repayments will move up and down in line with the interest rate movements of your lender and the Reserve Bank.

The interest only period will usually last up to 5 years, at which point your loan will revert to a standard principal and interest loan. Be aware that there are fewer home loan features available with this type of option.

For more information on interest management loans

An experienced investment finance mortgage broker can help you determine which interest management option is suitable for your investment needs, simply fill in the form on this page or call us on 13 LOAN or direct on +61 2 9249 3739.


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More information or help

For confidential assistance with your home loan or to talk to your local mortgage broker, call us at any time on 13 LOAN or call our direct line on +61 2 9249 3739.

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