Some of the best investor mortgages at the end of October 2020

Some of the best investor mortgages at the end of October 2020

Despite disruptions to Australia’s economy in recent months, and the potential for further uncertainty in the immediate future, some property investors may instead be thinking about the longer term. With property often showing its value as an asset over a longer period than other investments, it’s important to consider whether your investment mortgage not only suits your needs now, but is likely to continue to do so in the future.

If you’re one of the many property investors in Australia on the hunt for bargain loans, it’s important to compare the options available to you. To help you quickly compare mortgage offers, whether you’re investing for the first time or refinancing, you can look at the top-rated mortgage offers on RateCity’s Home Loan Leaderboards.

Best variable rate home loans for investors

Variable rate home loans often offer flexibility, which can appeal to many investors. While it’s not certain whether variable rates may rise or fall in the future, you may appreciate being able to quickly change your mortgage situation, whether that involves accessing money from your offset account or redraw facility, or quickly refinancing to a lender that better suits your needs.  

Best interest-only investor home loans

Interest-only home loan repayments traditionally appeal to property investors, as these lower repayments can help to minimise monthly costs and maximise rental yields while you wait for the property’s value to increase. Additionally, with many investors in a relatively precarious economic position due to the COVID-19 pandemic and recession, switching to an interest-only mortgage could help to relieve some of the extra financial pressure for a limited time.

Best fixed rate investor home loans

In uncertain times, property investors may welcome a touch of stability. Fixing your mortgage interest rate for three or five years can help you to lock in low repayments, for simpler budgeting. And with mortgage lenders slashing their fixed-rate deals in recent months, there are plenty of potential options to choose from.

3-year fixed rates

5-year fixed rates

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Learn more about home loans

What is the amortisation period?

Popularly known as the loan term, the amortisation period is the time over which the borrower must pay back both the loan’s principal and interest. It is usually determined during the application approval process.

How common are low-deposit home loans?

Low-deposit home loans aren’t as common as they once were, because they’re regarded as relatively risky and the banking regulator (APRA) is trying to reduce risk from the mortgage market.

However, if you do your research, you’ll find there is still a fairly wide selection of banks, credit unions and non-bank lenders that offers low-deposit home loans.

What is the ratings scale?

The ratings are between 0 and 5, shown to one decimal point, with 5.0 as the best. The ratings should be used as an easy guide rather than the only thing you consider. For example, a product with a rating of 4.7 may or may not be better suited to your needs than one with a rating of 4.5, but both are probably much better than one with a rating of 1.2.

Do other comparison sites offer the same service?

Real Time RatingsTM is the only online system that ranks the home loan market based on your personal borrowing preferences. Until now, home loans have been rated based on outdated data. Our system is unique because it reacts to changes as soon as we update our database.

How much information is required to get a rating?

You don’t need to input any information to see the default ratings. But the more you tell us, the more relevant the ratings will become to you. We take your personal privacy seriously. If you are concerned about inputting your information, please read our privacy policy.

How is the flexibility score calculated?

Points are awarded for different features. More important features get more points. The points are then added up and indexed into a score from 0 to 5.

What is appraised value?

An estimation of a property’s value before beginning the mortgage approval process. An appraiser (or valuer) is an expert who estimates the value of a property. The lender generally selects the appraiser or valuer before sanctioning the loan.

Mortgage Calculator, Loan Term

How long you wish to take to pay off your loan. 

What is a building in course of erection loan?

Also known as a construction home loan, a building in course of erection (BICOE) loan loan allows you to draw down funds as a building project advances in order to pay the builders. This option is available on selected variable rate loans.

What is appreciation or depreciation of property?

The increase or decrease in the value of a property due to factors including inflation, demand and political stability.

How often is your data updated?

We work closely with lenders to get updates as quick as possible, with updates made the same day wherever possible.

What happens to your mortgage when you die?

There is no hard and fast answer to what will happen to your mortgage when you die as it is largely dependent on what you have set out in your mortgage agreement, your will (if you have one), other assets you may have and if you have insurance. If you have co-signed the mortgage with another person that person will become responsible for the remaining debt when you die.

If the mortgage is in your name only the house will be sold by the bank to cover the remaining debt and your nominated air will receive the remaining sum if there is a difference. If there is a turn in the market and the sale of your house won’t cover the remaining debt the case may go to court and the difference may have to be covered by the sale of other assets.  

If you have a life insurance policy your family may be able to use some of the lump sum payment from this to pay down the remaining mortgage debt. Alternatively, your lender may provide some form of mortgage protection that could assist your family in making repayments following your passing.

How personalised is my rating?

Real Time Ratings produces instant scores for loan products and updates them based what you tell us about what you’re looking for in a loan. In that sense, we believe the ratings are as close as you get to personalised; the more you tell us, the more we customise to ratings to your needs. Some borrowers value flexibility, while others want the lowest cost loan. Your preferences will be reflected in the rating. 

We also take a shorter term, more realistic view of how long borrowers hold onto their loan, which gives you a better idea about the true borrowing costs. We take your loan details and calculate how much each of the relevent loans would cost you on average each month over the next five years. We assess the overall flexibility of each loan and give you an easy indication of which ones are likely to adjust to your needs over time. 

Mortgage Calculator, Repayment Frequency

How often you wish to pay back your lender.