Overview

Interest-only investment loans provide investors with the flexibility to make interest-only payments on their loan for a specified period, typically between one to five years. During this time, borrowers are not required to pay down the principal amount borrowed, which can free up cash flow for other investment opportunities or expenses. This type of loan is particularly popular among property investors seeking to maximize tax benefits and maintain liquidity. Additionally, interest-only loans may offer lower initial repayments compared to principal and interest loans, making them attractive for investors looking to manage short-term cash flow.

Advantages of interest-only investment loans

• Maximize Cash Flow: By making interest-only payments, investors can maximize cash flow and retain liquidity, allowing them to pursue other investment opportunities or cover expenses. 

• Tax Deductible Interest: Interest payments on investment loans are typically tax-deductible, providing potential tax benefits for investors. 

• Flexibility: Interest-only loans offer flexibility in repayment structures, allowing investors to tailor their loan to their financial goals and circumstances. 

• Lower Initial Repayments: Initial repayments on interest-only loans are often lower compared to principal and interest loans, providing investors with lower entry costs. 

• Potential Capital Growth: Investors may use the cash flow saved from interest-only payments to reinvest in their portfolio, potentially leading to greater capital growth over time. 

• Strategic Investment: Interest-only loans can be a strategic tool for investors looking to leverage their investments and manage their cash flow effectively