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Investors divided on fixing loans

by Georgia Brown10 minute read
The Adviser

Australian property investors are split over whether now is a good time to fix their loans, new research has revealed.

A survey conducted by property investment consultancy Momentum Wealth found that 50 per cent of respondents believed that now was a good time to fix their loan interest rates, while the other 50 per cent thought they should wait.

Furthermore, 33 per cent of investors hadn’t reviewed their loans in the last 12 months.

The survey also revealed that 42 per cent of investors had considered acquiring property via an SMSF.


The most popular goal for investors is acquiring property, according to the survey, with 45 per cent of respondents aiming to buy a property sometime in 2016.

Additionally, 26 per cent of investors said their main goal over the next 12 months was to review their current property portfolio, while 17 per cent said they would continue saving to buy their next investment property.

When asked to identify the biggest roadblock to buying an investment property right now, 18 per cent of respondents noted life circumstances as the main barrier, while 16 per cent said they did not have enough equity, and 13 per cent said they did not think it was the right time to buy.

The survey also found that established houses were the most popular type of investment property to purchase, with 48 per cent of investors saying this option appealed to them the most. This was followed by development sites or syndicates (25 per cent), new houses and land (11 per cent), and apartments or units (8 per cent).

Momentum Wealth managing director Damian Collins said that now could be a good time for investors to reassess their loans.

“The Reserve Bank of Australia has cut rates twice in the past 12 months, so investors who haven’t reviewed their loans in this time may be able to secure a better deal from their lender,” he said.

“There are plenty of great deals out there from a variety of lenders, so investors should visit a mortgage broker to ensure their rates are competitive.”

Mr Collins said that while there are plenty of good investment opportunities in Australia at the moment, investors should be watchful.

“With any investment, research is key,” he said. “A high-performing investment property can deliver huge returns to an investor, but choosing the wrong property can be a significant financial burden.”

“One of the most common misconceptions is that all properties within a city experience the same rate of capital growth. However, investors need to remember that there are dozens of markets within a single city, some of which will increase in price, while others will stagnate or possibly fall in value.”

[Related: Fixed-rate demand spikes]