Investment Loan Calculators
Being able to invest in property often hinges on two key figures – the amount you can borrow and your loan repayments.
Borrowing calculators are widely available on bank or mortgage broker websites. They show how much you may be able to borrow based on your income, expenses and current market interest rates.
While a borrowing calculator can provide a ballpark idea of your borrowing power, there are no guarantees that a bank will agree to lend you this amount.
That’s because some types of income you include in the calculator such as overtime payments, may not be taken into account by your lender when you apply for a loan. It can also be easy to underestimate your living expenses, and when you apply for a loan the lender may want to know more about your true spending patterns.
The bottom line is, a borrowing calculator should be seen as a useful guide but it’s no substitute for speaking with a mortgage broker.
Understanding how much you can borrow makes it easier to know what you can afford to pay for an investment property. The next step is knowing what your regular repayments are likely to be. This helps you work out your cash flow.
Online repayment calculators show the possible loan repayments for the loan, term and interest rate you select It’s also an easy way to see how your repayments can change if rates rise or fall, as well as discovering how much interest you’ll pay over the life of the loan.
Here too though, a repayment calculator should be seen as providing an estimate only.
The interest rate you use in the calculator can have a big impact on your repayments. By speaking with a mortgage broker, you may be able to secure a lower rate, which can trim your repayments and cut the overall interest cost.
The main point is that investment loan calculators are useful tools that take at least some of the guesswork out of how much you can borrow and what your repayments will be. Your mortgage broker can provide more accurate figures to let you really plan ahead.
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- Chapter One : Things to consider before investing in property
- Chapter Two : Determining where to invest
- Chapter Three : Investment Properties by Dwelling Types
- Chapter Four : Finance for Your Investment Property Purchase
- Chapter Five : How to Invest in Property
- Chapter Six : Adding Value to Your Investment Property
- Chapter Seven : Positive and Negative Gearing
- Chapter Eight : Getting Your loan
- Chapter Nine : Selling your Investment Property