Can Refinancing Investment Property Save You Money?
Refinancing investment property portfolios can be a very worthwhile choice, providing you with savings and the opportunity to own your properties sooner.
Our clients had a portfolio of three separate properties – two were investment loans and one was their own family home. Their portfolio had them locked into loans totalling $1.88m and a hefty cycle of repayments.
Their investment loans were set up to have interest only repayments applied, and as a result, our client had not paid anything off towards owning the properties in the 5 years since they had purchased them.
Refinancing Saves Our Client over $36k Annually
A thorough assessment by Dream Financing determined that the contractual arrangements were not optimal for the client and we began the process to refinance their investment properties as well as their home loan.
The savings across all contracts equated to $36,260 annually in interest alone.
New Lender Offers $4000 New Business Rebate to Refinance
Refinancing property loans often means having to pay additional fees. It is important to know what these fees are up front as there could be a risk of the fees outweighing the benefits.
In this instance, Dream Financing was able to refinance to a lender who was offering a $4000 rebate for new business. This more than covered the refinancing fees and our client was much better off for it.
Principal + Interest Means Debt Will Be Paid Down
Each new contract had reduced interest rates. Refinancing the investment property portfolio reduced the interest rate by 1.55%, saving our client $21,850 per year. The new contract on their owner-occupied property reduced the interest rate by 1.31% or $14,410 per year. With a total saving of $36,260 per year, this placed our client in a much better position financially, however it was important to address the structures of the loans too.
The contracts negotiated by Dream Finance replaced the original interest-only loans with loans that covered both principal and interest. This means that the client was now paying down their debt and work toward owning their homes faster.
Should I Refinance My Investment Property?
Choosing to refinance both their investment properties and their family home loan, was a great choice for our client. The team at Dream Financing secured new contracts that offered many benefits:
- $1.88m worth of loans were refinanced across 3 separate properties
- The lender provided a $4k new business loan rebate which covered the costs of refinancing
- Saved $14 410 per year on the owner-occupied property (reduction of 1.31% on interest rate)
- Saved $21,850 per year on two investment properties (reduction of 1.55% on interest rate)
- New loans covered both principal and interest so that clients pay down debt.
Dream Financing has assisted many clients to get closer to financial freedom. Making the decision to refinance investment property and your owner-occupied premises may be the solution for you too.
Every situation is unique and fresh eyes and an experienced team could provide you with the answer.
With so many years of experience in the industry and a wealth of knowledge about the refinancing process, Dream Financing will guide you towards the best options available.
Dream Financing is the mortgage broker of choice for Brisbane North, including Eatons Hill, Albany Creek, Warner, Draper, Samford and surrounding areas. We’ll help you find the best loan products no matter what your personal situation is.
We offer expert advice on a huge range of services including home loans, investment property loans, cashflow finance for self-employed, commercial property loans, car loans for self-employed and equipment loans for self-employed.