Interest only home loans
- What is an Interest Only Loan?
- With an interest only loan, you only repay the interest portion of the loan. You are not required to repay any of the principal.
- How does QTCU's Interest Only Loan work?
- At QTCU, interest only loans are available to invest in property, shares and managed funds. The repayments are automatically drawn from a nominated savings account monthly, and you can choose from variable or fixed for 1, 2 or 3 years, secured by a mortgage over residential property. A standard interest only term of 5 years applies, after which the loan can be paid out or the contract re-negotiated to either a new interest only loan or a principal and interest loan.
- What are the benefits of an Interest Only Loan?
- For a start, the lower repayments will assist your cash flow. Plus, this loan allows you to use the equity in your home to make tax advantaged investments. Generally, the interest you pay is tax deductible as long as you are investing in an income producing asset. So while your investment is generating income and growing in value, the cost to you is minimised.
- How do the Rates Compare?
- Interest only rates are generally the same or slightly higher than owner-occupied rates, which makes them very competitive. If you're investing in shares or managed funds, an interest only loan may be a better option than a personal loan.
- How Much can I Borrow?
- The amount you can borrow depends on the amount of equity you have in your home. However, you will need a deposit – 10% if you have mortgage insurance, and 20% if you don't.
- Are there any Fees?
- A standard establishment fee applies, after which there are no ongoing fees.
A Product Disclosure Statement (PDS) is available for this product and you should read the PDS before making any decisions about the product. As this advice has been prepared without considering your objectives, financial situation or needs, you should, before acting on this advice, consider its appropriateness to your circumstances.
