The Reserve Bank lifted the cash rate to 4.85% on 3 November, its fifth rise this year and the highest in 18 years. Property values across the country have fallen every month since March, and Sydney’s have fallen further. If you own an investment property, that means higher repayments on a property that’s worth less than it was, and probably a few questions you’ve been turning over at night.
These are the ones we hear most, each with a short answer that starts with the loan.
The questions
Should I fix my investment loan? It depends on whether you need a set repayment more than the freedom to sell or refinance, and a split often gives you some of both.
Should I sell or hold? It depends on where you think the property is heading, what you’d do with the money, and whether the repayments are what’s hurting.
I won’t pass another bank’s test. Can I still refinance? Start by asking your own bank for a better rate, then see whether a lender will test a straight swap more gently.
The rent doesn’t cover the mortgage anymore. Work out the real monthly gap, then shrink it with a sharper rate and a spell of interest only.
The valuation came in low. Can I still refinance or use my equity? Your current loan isn’t in default while you keep paying. The low figure caps new borrowing, so get other lenders’ valuations.
Where to start
Nobody knows where rates go next, and we won’t guess. What we can do is look at your loans as they are today and tell you which of these questions matters most for you.
If you’d like that, book a free portfolio review. We’ll go through your loans with you, and you’ll leave knowing what to do first.