Should I apply for an interest only loan?
Interest only loans may be ideal for covering a short term situation or for an investment property. For example, you may be buying a new home before selling your existing property or need to do some renovations.
Interest only loans keep your repayments as low as possible. But, because you aren’t paying any of the principal (the money you borrowed) the total interest you end up paying will be higher than if you were paying off the principal as well.
Bear in mind too, because each of your regular payments only covers the interest owing on the principal, you will pay the full amount owing in one final payment at the end of the term.
There may be tax implications with an investment property and the best outcome for you will depend on your individual circumstances. So it’s best you seek advice from your accountant or tax advisor to decide if an interest only loan works in your favour.
See our home loan options for this and other types of home loans.
Related Answers
-
Due to the Reserve Bank of New Zealand’s (RBNZ’s) loan-to-value ratio (LVR) restrictions, loans for residential investment properties generally have ...
-
If you are linked to a Company/Trust, you are allowed to manage its facilities. If you are unable to view ...
-
Property information has been sourced from CoreLogic NZ Ltd. The estimated value is not an accurate representation of the market ...
-
There are advantages and disadvantages to all of these options and you need to consider your personal circumstances when deciding. ...
-
The simple way to pay off your loan is through your Solicitor. Your Solicitor will request a repayment figure and ...
-
A loan statement is not currently available to view in FastNet Classic internet banking. To request a loan statement: Send ...
-
The best home loan strategy is one that takes into account your individual circumstances, like your cash flow. Does your ...
-
To change your home loan payment, go in to the Manage Repayment function from the Home Central hub page. From ...
-
Home Central is a place for you to manage your home loan with FastNet Classic internet banking and the ASB ...
-
If you’re looking for ways to pay off your fixed interest rate loan faster, there is some flexibility to do ...
-
To reverse a change you've made in Home Central please call us on 0800 100 600 weekdays 8:00am - 8:00pm ...
