Too many property owners are paying the price for not obtaining independent advice when they arranged the finance for their property purchase.
No matter how informed you are or how good a loan might seem, discuss the loan structure & your options with a property lawyer before committing to the loan.
Tip 06 – Splitting Your Loan
- When borrowing money, ask whether you can split the loan into 2 parts – one part as a fixed interest rate loan and the other part as a variable rate loan.
- The benefit of the fixed rate portion of the loan is to protect you from interest rate rises for that part of the loan.
The benefits of the variable rate portion of the loan include:
- lower interest payments for that part of the loan where the variable interest rate drops
- the flexibility to make additional debt reduction repayments where surplus funds are available