Infographic: How much interest-only home loans are costing property investors in 2017

Some facts about property investors and interest-only loans

Here’s how interest-only loans stack up against principal and interest loans for property investors in 2017.

  • According to ASIC, up to 70% of property investors use interest-only loans
  • Interest-only borrowings in Australia rose from $88.7 Billion in 2012 to $153.8 Billion in 2015
  • In 2017, lenders have increased interest-only loan rates by up to 0.7% p.a. compared with principal and interest rates. Current interest rates can typically be 4.3% p.a. for an interest-only loan, but only 3.9% p.a. for a principal and interest loan – whereas at the start of 2017, the interest rate for the two loan types approximately equal.
  • Assuming an example situation involving a $544,000 home loan over a 30 year term for an investment property worth $680,000, and assuming the owner has a personal gross income of $118,000 a year and $300 a week rental income.. – An interest-only loan would yield a higher annual tax benefit ($3,039 versus $2,123), and lower monthly mortgage payments ($1,949 versus $2566) – But, after one year, a principal and interest loan would pay off a whopping $9,748 of the principal – which nets out as principal and interest being the better option to the tune of $3,778 in the first year alone.

    To find out whether you’d be better off choosing an interest-only loan talk to a UNO broker today

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October 26, 2023
What a fantastic experience using UNO Home Loans. Mike Parsons and the team were exceptional. Such an easy, hassle free experience, cannot recommend them highly enough. Mike Parsons was in touch every step of the way, and with him doing all the leg work, the transition to a refinanced home loan was a very easy one. Thank you!
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July 1, 2023
Scott Wilkinson has been fantastic when dealing with my broking needs. He has held my hand through every step of the way and has made purchasing my first home a much more comfortable experience than I anticipated.
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June 1, 2023
I have worked with Scott Wilkinson to get my home loan and he has been a massive help to navigate my first home purchase. He has taken care of all the financial details and I didn't need to worry about anything. Highly recommend him for his professionalism, patience and support!
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June 1, 2023
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Ashley Morson
We are truly grateful for uno home loans and our broker Karis Churchill. This is our second time purchasing a home with the help from Uno and both times have been a very positive experience. Our recent purchase had many obstacles due to different factors however it was our dream home and we were up for the challenge. Our broker Karis was a true support and went above and beyond. She communicated so well with our solicitor and the real estate agents. She kept us updated through every step and kept us motivated when things seemed impossible. Uno is very fortunate to have Karis as a broker and we would highly recommend her to anyone. Our family are so happy we are now in our new forever home. Thank you so much Karis and to the uno team!!!
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