Loans.com.au rolled out the industry's lowest mortgage rate to investors at 1.99%.
The interest rate is available as an introductory rate under the Smart Booster Investor product. Investors with a down payment of 20% or more can take advantage of the reduced rate, which is available for both Principal and Interest (PI) or Interest Only (IO) payment terms.
The rate is offered as a package for the previously launched Smart Booster home loan, which also has a variable rate reduced to 1.99%. This means that in order for investors to benefit from the product, they must also benefit from the owner occupancy rate through reapplication or refinance.
"This is currently the lowest investment loan rate offer in Australia," said Marie Mortimer, Managing Director of Loans.com.au. "Investors who are considering downgrading their investment property and own home to a lower rate should take the opportunity to reassess their loan provider and possibly refinance themselves."
The PI and IO options of the loan revert to a rate of 2.74% after one year. The owner occupancy rate, on the other hand, drops to 2.48%.
Investors should always look beyond securities rates when looking for home loans, said Sarah Megginson, editor of Your Mortgage, Your Investment Property and Australian Broker.
"A low rate is fantastic, but what if their lead times dropped to three months? Or, it could be that once you add a package fee , account maintenance fees and other fees, the loan costs you more in the long run than a mortgage that starts with a 2, "she says.
Megginson said this makes it essential, even for investors, to work with a mortgage broker. With a range of products available to borrowers, Megginson said it's best to narrow down the options.
"Right now, working with a broker is the key to getting a product and price that meets your needs," she said.
The low interest rate environment makes the housing market more accessible to buyers and investors, Shane Oliver, chief economist at AMP Capital, said in a recent analysis.
"Low mortgage costs also make the costs of financing an investment property very low," he said.
Oliver said government support measures dramatically increased household income, helping to prevent a significant increase in mortgage delinquencies and forced sales.
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