No longer limited by high barriers to entry and costs that only the 1% can afford, investing has become a more accessible path for aspiring portfolio builders of all kinds.
Thanks to the advent of online learning and free-for-all markets and platforms, the opportunity to grow one’s wealth is no longer limited to those who already have immense amounts of it. Whether you’re a high school student that has been indoctrinated by the internet or an older fellow with bills to pay and dreams to chase (costly ones, at that), there’s no better time to start investing than today.
After doing the necessary research and asking for input from well-established experts, you’ve finally built a strong investment strategy with the potential to rake in substantial returns. Convinced that your labour of passion will maximise your cash flow and capital growth-related goals, your next goal is to seek funding so your plans can take off—and this is where investment loans come in handy.
While considering your options and finalising how much you need, there’s one question that eventually comes to mind: How do I choose the right kind of investment loan for my portfolio?
The Types of Loans You Can Choose From
Thanks to the continuous efforts of lenders to cater to the needs of borrowers of all kinds, the number of available investment loan options grows every year. Of course, each option is built differently to suit a specific type of approach, investment vehicle, or investor profile.
To give you a better idea of what option is best suited for your needs when shopping around for an investment loan, here’s a quick rundown:
1. Variable Interest Rate Packages
These are a form of financial assistance with a base rate expected to change over time, which means it charges borrowers depending on how the cash rate is adjusted by the Reserve Bank of Australia (RBA) in response to economic conditions.
Generally, these packages are best suited for investors who aren’t so worried about cash flow fluctuations. When used correctly, these solutions can acquire investments while paying significantly lower rates, leading to more profit for those willing to play the game of variable interest rates.
Today, variable interest rate packages have extra features that help investors maximise their investments:
- Interest-only repayment schemes
- Additional repayments (also known as redraw facilities)
- Offset accounts
- Loan splits
2. Fixed Interest Rate Packages
Mainly geared towards property investors, fixed interest rate packages are another common type of investment loan. This is a product made for investors who prioritise certainty regarding costs and want their investment budgeting processes to be as efficient as possible. Investors have a more stable option for financing their plans, making it much easier to work with during forecasting and budgeting.
Today, fixed interest rate packages are a popular option among many conservative investors because their loan term will last only for as long as they own the property. And the relative stability they provide is what makes them well worth considering either way.
Both options are provided by Mortgage Broker Home Loans for property investors of all kinds!
Conclusion
Today’s available financial solutions make it much easier for any kind of investor to leverage their position and get the best loan for their financial needs and long-term goals. With this guide, you can seek the better option between variable interest rate and fixed interest rate packages that suit your investment style and goals.
Are you looking for a local mortgage broker in Melbourne ready to help you invest in the ever-growing Melbourne real estate market? Mortgage Broker Home Loans has got you covered. Get in touch with us today!
