Interest only loans have been in the headlines for a while now. And mostly, they’ve been used as a proxy for bad loan practice. However, the headlines never reveal the full story.
Interest only loans serve multiple functions. Namely: -
- As part of a sound investment strategy - using interest only loans and offset accounts to maximise income tax deductions, access to personal funds and maintain loan flexibility,
- Create wealth - free up income for investment in other wealth producing assets,
- Flexibility - where you're unsure if the property will be owner occupied or investment at a certain time in the future,
- Cash flow - to balance income and expenditure for a short period of time after purchase.
If you're considering an interest only loan you will need to plan carefully, be well prepared and know which lender to approach. The best way to achieve this is to consult your broker and have them give you advice on how to best structure your application and which lender is most likely to approve your application, as bank appetite for IO loans changes quickly and your broker knows the overall market better than anyone.
For more information on interest only loans and how to apply, call Taras at Runmore Loans on 0414636211. For impartial and objective advice that saves you money there is no better person to call.