If you're a tradie looking to grow your wealth through property investment, understanding fixed rate investment loan features is crucial. Unlike variable interest rates that can fluctuate with market conditions, fixed interest rates offer stability and predictable repayments for your investment property portfolio.
What Makes Fixed Rate Investment Loans Different?
When you're buying an investment property, whether it's a town house, apartment, or stand alone dwelling, a fixed interest rate locks in your loan amount repayments for a set period. This means your monthly outgoings remain constant, making it much easier to calculate investment loan repayments and plan your finances around your tradie income.
Fixed rate periods typically range from one to five years, after which your loan usually reverts to the lender's variable rate. During the fixed period, you won't benefit from rate decreases, but you're also protected from rate rises that could impact your borrowing capacity.
Key Features of Fixed Rate Investment Loans
Fixed rate rental property loans come with several distinctive features that tradies should understand:
• Rate Protection: Your Investment Loan Interest Rate stays the same regardless of Reserve Bank changes
• Payment Certainty: Consistent repayments help with budgeting and cash flow management
• Planning Advantage: Knowing exact costs helps with your property investment strategy and negative gearing calculations
• LVR Considerations: Loan to value ratio requirements still apply, typically up to 80% to avoid lenders mortgage insurance (LMI)
Understanding the Application Process
Applying for a investment loan with fixed rates follows a similar process to variable loans. You'll need to provide banks statements, demonstrate your income stability as a tradie, and complete the investment loan application with detailed financial information.
The streamlined application process typically includes:
- Research property options and determine your target loan amount
- Assess your borrowing capacity with current income
- Compare investment loan options from various lenders
- Submit your application with required documentation
- Property valuation and final approval
Ready to get started?
Book a chat with a Finance & Mortgage Brokers at Tradie Home Loans today.
Costs and Considerations for Tradies
When buying a rental property with a fixed rate loan, factor in additional costs beyond the purchase price. Stamp duty varies by state and can significantly impact your initial outlay. As a tradie, your irregular income patterns might require more thorough documentation during the application process.
Interest rate discounts may be available depending on your loan size and lender relationship. Some lenders offer package deals that can reduce your overall Investment Loan Interest Rate, particularly beneficial when building your first investment property purchase.
Rental Yield and Property Types
Your choice between a town house, apartment, or stand alone dwelling affects your rental yield calculations. Fixed rates provide certainty for your negative gearing strategy, as you can accurately predict interest deductions for tax purposes.
Different property types in various markets offer different rental yields. While apartments might offer higher rental yields in some areas, stand alone dwellings often provide stronger capital growth potential. Your property investment strategy should align with your long-term financial goals as a tradesperson.
Making the Right Choice
To access Investment Loan options from banks and lenders across Australia, consider your personal circumstances and market outlook. Fixed rates suit tradies who value payment certainty and want to protect against rising rates during their fixed period.
The property market can be unpredictable, but fixed rates provide stability for your investment calculations. Whether you're purchasing your first investment property or expanding an existing property investment portfolio, understanding these loan features helps you make informed decisions.
Working with Specialists
As tradies often have unique income structures and financial situations, working with mortgage brokers who understand the trades industry can streamline your investment loan journey. We help you compare options across multiple lenders and find investment loan options that match your specific needs and circumstances.
Call one of our team or book an appointment at a time that works for you to discuss your investment property goals and explore fixed rate loan options tailored for tradies.
