With rising interest rates, many investors are looking to optimize their loan portfolios. One strategy is changing investment property loans into home loans. Home loans typically have lower interest rates and more flexible repayment options. By converting investment loans, investors can reduce interest costs and improve cash flow.
lower interest rates on home loans
Home loans tend to have lower interest rates compared to investment property loans. This is because lenders view home loans as less risky. Converting an investment loan into a home loan for the same property taps into these lower rates.
more repayment flexibility with home loans
Home loans offer more flexible repayment options like interest-only periods and redraw facilities. This assists with managing cash flow and navigating rising rates. Investment loans lack the same flexibility.
In conclusion, changing an investment property loan into a home loan can optimize interest costs and repayment flexibility. Carefully weigh the pros and cons for your situation.