Do Interest Only Home Loans Still Make Sense?

UNO home loans

Six months ago interest only loans made a lot of sense for property investors. Today, the story is very different.

18 years ago I was living out of a tent, in a little village named Balibo, on the top of a mountain in East Timor when Matt, a mate of mine, said something that’s stuck with me ever since. What did he say? “No one ever went broke making a profit” Why is that important? Because for eons, people’s innate aversion to pay the taxman has led to a string of poor financial decisions, which have been slowly bleeding them dry. One of those poor decisions (not in every case of course) is interest only loans. 10 years ago interest only loans made a lot of sense. The interest rates on interest-only loans were basically on par with principal and interest loans. It made perfect sense to go down that path to free up cash flow and maximise the tax-deductible portion of outgoings (the interest part of your home loan repayment). Today, the story is very different. Price pressures from industry regulators have increased the costs of interest-only loans so much that for most property investors, choosing an interest-only loan could be costing them thousands. The problem with this is, hardly anyone has changed their tune in terms of the type of loans they recommend to investors. Why? Well, they’re either lazy, they haven’t figured it out yet (pretty much the same as lazy) or they don’t have the smarts to articulate the risk vs reward. So to bust this lazy myth wide open we’ve developed a new calculator.

How can it help you?

This calculator will help you work out which loan type provides you the most benefit. We calculate the results by taking into consideration:

The interest cost of the investment loan compared to the tax savings of negative gearing
The amount you’ll be owing compared to your repayments

What do your results mean?

If your result is a positive figure (green coloured), you could be better off choosing a principal and interest loan. If your result is negative, you could be better off choosing an interest-only loan. Transparency is the cornerstone of everything we do at UNO. It’s why we get out of bed everyday. We couldn’t care less if you choose an interest only loan or a principal and interest loan. What we care deeply about is that it’s the right loan, for your specific situation, right now. To find out what works for you, use the calculator right here: And if you want to take it one step further than the calculator, you can book a call with our customer care team today. Book a call in with UNO

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TESTIMONIALS

What our customers are saying

Nadine Steffens

April 19, 2024

Scott and the team at Uno are absolutely 💯 amazing. I don't think I could have done my loan on my own. They are highly motivated and I do recommend them.

Andrew

April 16, 2024

Dealing with Scott Wilkinson was an absolute delight. Scott is tenacious, hard working and readily available. He made a very stressful process for me and my partner smooth sailing. Would highly recommend.

Liam Sugiono

April 15, 2024

Amy and her team were efficient and knowledgeable as our broker. They were easily contactable and ensured all our needs were met.

Mike Vincent

April 10, 2024

Andrew is the best broker I have worked with and one of the few people who understands the investment journey from both a personal and professional standpoint. Andrew is an asset to anyone from a first home buyer to a seasoned investor.

Yu Su

April 9, 2024

Amy was very help and quick respond when I have questions. Really recommended.

John Cahill

March 7, 2024

Scott Wilkinson was my broker last year when I sought finance for a new property investment and refinance for my property port folio. He was an absolute delight to work with. He was always professional, on time and always available to talk at a moment's notice to discuss my credit options and give well considered advice; usually this was very much after-hours due to my work commitments during the day. He was always happy to talk. I had not used a mortgage broker in a long time opting to do the re-financing myself. This was primarily due to disappointing experiences I'd had with mortgage brokers in the past. However with the increasing complex nature of dealing with credit providers, I could see that I needed a good advocate to act on my behalf for this particular refinance. In all honesty I did not hold much hope that in the current credit environment I would be able to secure the finance I required for the new property investment I was wishing to secure. Scott found a way however and was able to secure the finance along with the refinance of my portfolio. I have since referred friends to Scott and I know they have been very happy with his work. He is ideal for property investors who have busy day-jobs and need someone who understands property investment strategy and is able to tailor credit advice and options to their needs. Scott provides this advice and information in a way that is clear and concise. He kept me up to date continually during the application process. He made what could have been a very stressful and frustrating process easy and straightforward. I could not recommend Scott and the team at UNO Home Loans more highly. They are all a delight.

Sally Mackenzie

February 19, 2024

We chose Uno Home Loans from their impressive web site knowing we were going to find it hard, on many fronts, to qualify for a home loan. We were incredibly fortunate to be assigned Mike Parsons as right from the get-go, despite the complexities, he hit the ground running for us. He was incredibly knowledgeable, with years of experience but what was immediately apparent and impressive was that he was totally invested in getting us over the line, doing absolutely everything possible, including working around the clock. Despite it being a relatively small loan in the order of things, Mike never missed a beat, getting docs ready, following up and answering every request from the proposed funder immediately. He kept us informed on progress the minute anything happened, and again if anything needed to be done, he was right on it. In short, we highly recommend Uno, and Mike, knowing what a remarkable job he did, over many weeks, to get us our loan. He got us a great deal, with far better rates than we expected, so we couldn't be happier. In fact, without doubt, you'd be hard pressed to find a more personable, sharp, hard working, dedicated professional who clearly prides himself on getting his customers standout results.

Rod

February 13, 2024

Scott and his team were just A-mazing. We felt supported through the whole process with the greatest quality and care. Every question answered right in time, or even before we asked. The process was smooth and we got the best outcomes we could have wished for.

Angela Biddle

February 6, 2024

Our mortgage recently came up for renewal, and with interest rates skyrocketing we were looking for ways to minimise the impact. Michael and his team were proactive and attentive. Michael spent time with us to understand our circumstances. He found mortgage options that worked with our current financial situation and longer investment plans. He presented clear options, providing guidance where needed. He and his team were helpful and responsive - streamlining the process and keeping us updated through the negotiations. In the end, Uno did the heavy lifting and secured a significantly better rate than our current bank offered, all with friendly, personal service. We would highly recommend UNO Home Loans.

Fotis Bikas

January 15, 2024

I cannot help but congratulate Scott Wilkinson of UNO Home Loans for being an absolute credit to both his company and the entire loans industry. Scott is a truly rare gem of a broker in that he will not only go the extra mile to achieve for each customer the very best deal, but his knowledge of all and sundry within the industry is unsurpassed (you will see what I mean if you speak to him). Additionally, Scott has a clear passion for imparting his wealth of information with each customer, whereas the conversation with most other brokers would simply be over if they could not get you the best deal. For me, Scott Wilkinson of UNO Home Loans stands head and shoulders above the competition and I feel privileged to benefit both from his expertise and professionalism whenever it is time for a refinance or new loan.