Right now the interest rate increase is a hot topic for home owners and property investors. What impact will the current and predicted rate increases have on the market and mortgage holders?
There’s no one size fits all answer for this question because it depends on your own situation.
For investors, there are many factors that come into play, such as the loan to value ratio (LVR), debt to income ratio, cash returns from your investment, the location and demand for rental property in your area.
Whilst loan repayments will increase, rents are also forecast to increase due to:
- expats returning home,
- international students coming back,
- a drop in construction approvals, and
- the government ramping up migration to help boost the economy post pandemic.
Remember, that we always recommend that you invest in property as a long term strategy. The little bumps, humps and dips in rates, value and yield are part of the journey.
But if you invest well, in an area that is prime for both rental demand and capital growth, then this is the strategy for successful investing.
One thing that we recommend you do is to speak to your mortgage broker to review your existing loans and explore your options and capacity to secure an investment loan. We can recommend a broker that specialises in investment loans if you need a referral.
As always, keep your eye on your own goals and monitor the changing environment. Don’t let fear or procrastination take you off track.
If you’re ready to explore your investing options, we’d love to arrange a time to chat.
