Does your investment loan have a three in front of it?

In this month’s monthly market update we discuss investment lending and rates. Our investor clients are not as active in the market place at present and most of our investors are looking to hold their properties in the medium to long term and wait for property prices to increase in Melbourne. This means we are fixing many of our investor client loans at a 3 year fixed rate with interest only repayments. These products are currently the most competitive on the market, starting at 3.69% which is 1% less than most people are paying on their current investment loans. If you lower your interest rate by 1%, this results in a $5,000 annual interest saving on a $500,000 loan.


Last month we had a client purchase a two story, double fronted property in Glen Iris for $1,550,000. This property was originally quoted for $1,700,000 and passed in, on a vendor bid. This was excellent buying as it was on significant land parcel of 580 square metres and had 4 bedrooms and 2 bathrooms. Only 12 months ago a similar property next door sold for $1,740,000. We had previously arranged a pre-approval for our clients through the Bank Of Melbourne which enabled them to negotiate price based on a quick settlement of 30 days that was beneficial to the vendor.

The key to negotiating and securing a property at the lowest possible price is by having your home loan pre-approved. An unconditional offer on a property is so much more enticing to vendors than a contract that is subject to finance. In this market most vendors will accept the lower unconditional offer versus a higher offer that is subject to finance.


‘The correction is nearing its end’: HSBC says Australian home prices will bottom later this year 

Australia’s housing market downturn, already one of the largest on record in terms of price falls and duration, is likely to come to an end in the second half of this year, says Paul Bloxham, Chief Australia and New Zealand Economist at HSBC.

‘The correction is nearing its end’: HSBC says Australian home prices will bottom later this year | David Scutt