Do you know Variable Rate Investment Loans work for you?

Understanding Variable Rate Investment Loans

When buying an investment property, selecting the right investment loan product is fundamental to your property investment strategy. Variable rate investment loans offer property investors considerable flexibility in managing their investment property finance. Unlike fixed rate options, variable interest rate loans fluctuate with market conditions, which can work in your favour when investor interest rates decrease.

For Burswood property investors, understanding the investment loan features available through variable rate products is essential for building wealth property and achieving financial freedom. At Luxe Finance Group, we access investment loan options from banks and lenders across Australia, ensuring you receive the most suitable investment loan amount for your circumstances.

Key Investment Loan Benefits of Variable Rates

Variable rate investment loans provide several advantages that fixed interest rate products cannot match:

• Flexibility in repayments: Make additional repayments without penalties, helping reduce your loan amount faster
• Interest rate discounts: Benefit when the Reserve Bank reduces rates, potentially lowering your investor borrowing costs
• Access to offset accounts: Link transaction accounts to reduce interest charged on your rental property loan
• Redraw facilities: Access extra repayments when needed for portfolio growth or property maintenance
• No break costs: Refinance or switch to another product without expensive exit fees

These investment loan features make variable rates particularly attractive for investors focused on maximising tax deductions and maintaining flexibility throughout their investment journey.

Interest Only vs Principal and Interest Options

Variable rate investment loans typically offer both interest only and principal and interest repayment structures. Interest only investment loans allow property investors to maximise their tax benefits, as all interest charges become claimable expenses against rental income.

Many investors choose interest only periods because they:

1. Generate better cash flow from need rental income
2. Increase negative gearing benefits
3. Allow reinvestment of savings into additional properties
4. Keep calculating investment loan repayments at lower amounts initially

Principal and interest repayments, conversely, help build equity faster and reduce your overall debt. The choice depends on your property investment strategy and whether you prioritise passive income or long-term equity growth.

Understanding Your Investor Deposit and LVR

The investor deposit you contribute directly affects your loan to value ratio (LVR). Most lenders require property investors to provide at least 10-20% of the property value as an investor deposit. A lower LVR generally means:

• Lower investor interest rates
• Reduced or eliminated Lenders Mortgage Insurance (LMI)
• Greater borrowing capacity for future investments
• More favourable lending terms

If you have substantial equity in existing properties, you might leverage equity to fund your investor deposit, avoiding the need to provide cash savings. This equity release strategy enables portfolio growth without depleting your liquid assets, though it increases your overall investor borrowing.

Tax Benefits and Claimable Expenses

One significant advantage of investment property finance is the range of tax benefits available. Beyond negative gearing benefits, property investors can claim:

• All interest charges on the investment loan amount
• Stamp duty (spread over several years)
• Body corporate fees for apartments and units
• Property management and maintenance costs
• Depreciation on the building and fixtures
• Insurance premiums

These claimable expenses can substantially reduce your taxable income, improving the overall return on your investment. Working with qualified tax professionals ensures you maximise tax deductions while remaining compliant with Australian Tax Office requirements.

Investment Loan Application and Approval Process

The investment loan application process differs from owner-occupied home loans. Lenders assess:

• Your existing income and expenses
• Rental income potential (usually calculated at 80% to account for vacancy rate)
• Your current debt commitments
• The property's value and rental yield
• Your overall investment property rates and serviceability

Luxe Finance Group streamlines this process by preparing comprehensive applications and accessing a wide range of investment loan products suited to your circumstances. We help you understand your borrowing capacity and structure your investment loan for optimal tax efficiency.

When to Consider Investment Loan Refinance

Investment loan refinance becomes worthwhile when:

• You can secure better investor interest rates
• You need to access equity for additional purchases
• Your current loan lacks essential investment loan features
• You want to consolidate multiple investment properties
• Your financial situation has improved, qualifying you for better terms

Regular loan health checks ensure your investment property finance remains aligned with your goals. Many Burswood investors discover significant savings through refinancing to more competitive products.

Calculating Your Investment Property Rates

When calculating investment loan repayments, consider:

• The investment loan amount you require
• Current variable interest rate offerings
• Whether you choose interest only or principal and interest
• Available rate discount opportunities
• Additional fees and charges

Investment property rates vary between lenders and depend on your LVR, loan amount, and overall financial profile. As specialists in investment loans, we help you compare options and identify products delivering genuine value.

Growing Your Property Portfolio in Burswood

Burswood offers property investors excellent opportunities for capital growth and rental returns. The suburb's proximity to Perth CBD, Crown Casino, and Optus Stadium makes it attractive to tenants seeking lifestyle amenities and employment access.

When buying your first investment property or expanding your property portfolio, consider how variable rate loans support your long-term strategy. The flexibility to make additional repayments during high-income periods and the ability to leverage equity as your portfolio grows makes variable rates ideal for active investors.

Working With Luxe Finance Group

Our team understands the Burswood property market and the specific needs of local investors. We provide access to investment loan options from banks and lenders across Australia, ensuring you secure appropriate investment property finance for your goals.

Whether you're considering rentvesting, purchasing your first rental property, or refinancing existing investments, we offer personalised advice tailored to your financial situation and investment objectives.

Variable rate investment loans provide the flexibility, features, and potential savings that active property investors require. With the right loan structure, investment property rates, and tax strategy, you can build wealth through property while maintaining financial flexibility.

Call one of our team or book an appointment at a time that works for you to discuss your investment loan needs and discover how we can help you achieve your property investment goals.