How to pick the best investment loan

For property investors, finding the best loan deal could be a great way to maximize on returns. A great loan deal will offer comfortably low repayments, which can help save a lot of money.  But how can you determine the best loan deal when you are shopping around? Here are a few tips to help you out.

Consider the loan rate

You can maximize on your investment’s returns by securing a low interest investment rate. Even a slight difference in your rates could significantly affect your profitability in the long term. You need to understand the rates on offer for each loan product before making your choice.

Most investment loan products will offer either a fixed r variable rate. It is up to you to determine which of the two offers the best value. Variable investment loan rates will offer flexibility and could even decrease in the duration of your repayment, although a rise in overall rates will translate to more expensive repayments.

Conversely, a fixed loan rate will offer predictable loan repayment since the entire cost of your loan is predetermined. You need to consider your investment strategy before making this choice to find a loan with ideal terms.

Look into lenders’ fees

What does your lender charge on top of your loan repayment? Different lenders, even those who offer similar products, will have varying fees that could prove to make some products more valuable than others. You need to consider the fees charged upfront, as well as any additional management charges that could increase the cost of your investment loan.

Assess additional loan features

The additional perks of your loan could improve the value of each product uniquely. There are many loan features that are common for investment loans, including unlimited additional repayments, interest-only repayment options and a redraw offset facility.

So, what do these features offer? A redraw offset facility links a sub-account to your loan, which will work to reduce the amount of interest you will pay. Over time, you can save on interest with this feature by increasing the value of this account. Interest-only repayments allow borrowers to meet only interest repayments for duration of time, which facilitates rapid growth. An unlimited additional repayment option allows you to take advantage of low variable rates to reduce the cost of your loan by making more repayments without facing any penalties.

Look into comparison rates

In most instances, the advertised loan terms are not usually offered unaltered. Lenders will claim to offer attractive products but place unattainable demands for investors looking to access these loans at the advertised rates, such as by setting a very high credit score.

When comparing loan products, it is important to use the closest representation of its cost to determine whether or not it is affordable. You can do this by visiting legitimate loan comparison websites.


Your potential lenders could each provide a key facts sheet that will allow you to compare different aspects of their loan products for a wholesome choice. The key facts sheet should detail out relevant information on the loan such as the expected cost and additional features, and provide a personalized comparison rate for easier maneuvering.

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