The Active Home Loan Manager

Property investors: How much more is your interest-only home loan costing you?

Calculate the benefit of a principal and interest loan over an interest-only loan for your investment property.


If you have an investment property, chances are you’re financing it with an interest-only home loan.

For many years, most lenders, mortgage brokers and financial advisers have recommended interest-only loans over a principal and interest loan to free up cash flow, and maximise the tax-deductible portion of outgoings (the interest part of your home loan repayment).

However, 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 property investors thousands.

 

How this calculator can help you

This calculator will help you work out whether choosing interest-only or a principal and interest repayments for your investment property loan could be financially better for you.

We calculate the results by taking into consideration:

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

 

 

What 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.

 

What to do next

If your current lender or mortgage broker hasn’t already reached out to you to tell you that you could be saving money by switching to a principal and interest loan, you deserve to be getting better advice and service. You have two options to optimise your financial outcome easily, right now:

This information is general in nature, and you should always seek professional advice when making financial decisions.

 

Add a Comment

Vincent Turner is the Founder and Chief Innovation Officer at uno home loans - an online mortgage broker that gives customers the power to search, compare and settle a loan online. Get started at unohomeloans.com.au.

Blog

You might also be interested in

Armed with uno’s intel, PJ called her lender and got a better rate

After plugging a few details into uno’s loanScore tool, PJ discovered her home loan rate was almost two percentage points higher than others offered on uno’s panel.

Olivia White’s top tips for paying off your home loan

Motherhood and Lifestyle blogger and popular influencer Olivia White (House of White) recently tested uno’s loanScore™¬†technology to see how her loan compared to others. Needless to say, she found the tool very useful.

Mortgage debt surging among older Australians

Most Australians think they’ll own their homes outright by the time they retire, but a new report details how mortgage debt among older Australians blew out by 600% between 1987 and 2015.

Search.
Compare.
Settle.
Strut.

Get started

Find out if your home loan is any good

Get your loanScore