If you have a loan for your investment property, you should be currently expecting a variable interest rate of about 6 – 6.1%pa.
If you would like to refinance your investment property loan, it is good to know that associated costs are tax-deductible, for example:
- the costs for breaking your existing loan early (e.g., fixed rate break fees).
- the costs associated with your new (i.e. refinanced) loan, such as application or establishment fees, lender valuation and/or title search fees for your property, and lenders’ mortgage insurance (if applicable).
Other potential benefits of refinancing your investment property loan could be:
- access to equity if you would like to purchase additional investment properties
- flexible loan features that may better suit your investment strategy, including interest only loans, fixed rate loans or variable rate loans.
- opportunity to renegotiate your loan terms, such as a shorter term for faster debt reduction or a longer term for lower monthly payments.
- enhance the property value by using the funds from a cash-out refinance to renovate or improve your investment property, this could help increase its market value and rental income potential, ultimately improving your return on investment.
Refinancing Your Investment Property
It is important to note that refinancing also comes with costs, such as loan application fees, valuation fees, and legal fees. Therefore, it is essential to carefully evaluate the costs and benefits of refinancing and to consult with a mortgage broker to determine whether it is a suitable strategy for your investment property. Speak to our mortgage broker, Brett Elliot for more information.
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