What Is A Fixed-Rate Investment Loan?
A fixed-rate investment loan is one where the interest rate on the loan is fixed – locked in – for a set period of time. During the fixed period, the interest rate on the investment loan will not change.
Unlike variable-rate home loans, you’ll be committed to that lender for the fixed rate period and you’ll have to pay break costs if you refinance early.
Find out which lenders can offer you a great fixed interest rate and when to consider fixing your investment loan.
Current Fixed Rates On Investment Loans
Investment Loans Secured On Residential Properties
| Loan Category | Interest Rate | Comparison Rate* | Contact Us |
|---|---|---|---|
| 1 year fixed | 6.29% | 7.23% | Apply |
| 3 years fixed | 5.94% | 6.53% | Apply |
| 5 years fixed | 5.99% | 7.92% | Apply |
Investment Loans Secured On Commercial Properties
| Loan Category | Interest Rate | Contact Us |
|---|---|---|
| 1 year fixed | 6.44% | Apply |
| 3 years fixed | 5.99% | Apply |
| 5 years fixed | 5.99% | Apply |
Current Fixed Rates On SMSF Investment Loans
Investment Loans Secured On Residential Properties
| Loan Category | Interest Rate | Comparison Rate* | Contact Us |
|---|---|---|---|
| 1 year fixed | 7.79% | 8.39% | Apply |
| 3 years fixed | 7.24% | 7.84% | Apply |
| 5 years fixed | 7.44% | 8.04% | Apply |
Investment Loans Secured On Commercial Properties
| Loan Category | Interest Rate | Contact Us |
|---|---|---|
| 1 year fixed | 8.29% | Apply |
| 3 years fixed | 7.99% | Apply |
| 5 years fixed | 7.99% | Apply |
*WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Each comparison rate is calculated based on $150,000 over 25 years for a secured loan.
You can check out the investment loan rates page for current fixed rates on offer for low doc, lease doc and no doc investment loans.
Don’t Pay More Than You Have To
It is difficult to find consistency when it comes to interest rates. There are some lenders that charge more for a product while others charge less.
You may get amazing investment loan discounts if you have a home loan with the same lender.
If you don’t have a home loan or you’re planning to go with another lender, you’ll need to go for one that can offer competitive pricing to investors.
You’ll have to shop around thoroughly but your Home Loan Experts mortgage broker can help you.
How To Avoid Being Overcharged
You may not realise that you’re being overcharged! Banks have sneaky ways to ramp up your interest rate so you need to be vigilant.
The key to avoid being overcharged is to regularly review your rate.
If your investment loan is more than two years old, it’s time to consider refinancing. Some of the pricing on older investment loans isn’t competitive at all.
Also, if you’ve paid off your investment loan to below $150,000 and you have a professional package, you may want to consider switching to a basic package. Although you’ll be saving with an interest discount, you’ll often be paying more in annual fees with a professional package.
Should I Fix My Investment Loan?
Fixed rate investment loans have high exit fees or break fees that don’t allow you to make large extra repayments.
If you fix your interest rate, it’s similar to having a binding contract, which can cost you a small fortune if you break it.
You may be better off on a variable rate on your investment loan if you’re planning on:
- Selling your investment property.
- Making a large lump sum repayment or large amounts in extra repayments.
- Refinancing your investment loan.
However, if you’re planning on making extra repayments, you may want to get a flexible fixed rate investment loan instead.
Note that this won’t help if you’re selling or refinancing because you’d still be have to pay large exit fees.
You can check out our Should I Fix? guide if you want to learn more.
Are Fixed-Rate Investment Loans Available For Construction?
Yes, you can get a fixed-rate construction loan.
If your bank doesn’t allow you to fix on a construction loan then you can choose to build using a variable rate loan. Once you’ve completed construction, you can lodge a variation request to fix your interest rate.
However, this does pose a problem. If interest rates change while you’re building then you’ll need to accept the new rate.
You can also apply with a lender that will allow you to fix the rate during construction.
Frequently Asked Questions (FAQ)
How Much Deposit Do I Have To Put Down For An Investment Property?
As with any other type of loan, lenders usually require a standard deposit of around 20% of the total purchase price for an investment property. However, if you have a good credit score and a low debt-to-income ratio, you may be able to secure financing with a lower deposit. Keep in mind that 10% of the purchase price, which comprises a 5% deposit and 5% purchase expenses, is the minimum amount you will need to get a loan approved.
When Should You Choose A Fixed-Rate Investment Loan?
A fixed-rate investment loan is a great option for investors who want to lock in their repayment amount over the life of their loan. This gives you peace of mind that your repayments won’t be subject to changes in interest rates and can help you budget more easily.
If you plan on expanding your property investment portfolio, a fixed-rate loan could be the ideal choice, as it gives you the stability to plan for the long term. However, fixed-rate loans usually charge higher interest rates than variable-rate loans, so it’s important to weigh the pros and cons before deciding.
When Should You Choose A Fixed-Rate Investment Loan?
It all depends on your circumstances. Five-year fixed-rate home loans offer more stability over the long term, with assurance that your investment loan repayments won’t change for five years, regardless of market conditions. On the other hand, two-year fixed-rate mortgages can be beneficial if you want to take advantage of lower interest rates in a short period. Ultimately, it’s important to consider your budget, investment goals and risk preferences when deciding which type of fixed-rate loan best suits you.
Get The Experts On Your Side!
Our mortgage brokers specialise in fixed-rate investment loans. We know the policies of many prime and non-bank lenders all over Australia and can help you select the right lender for your situation.
Call us on 1300 889 743 to speak with one of our credit specialists or enquire online for a quote on several fixed-rate investment loans within 24 hours.
