Many property investors are currently on interest-only loans for their investments.

It’s easy to understand the appeal with lower upfront repayments- but what does this mean for the long term, when it comes to reaching your goals?

Here are some tips from our most successful landlords about why principal and interest repayments may work better for you:

• Lower interest rates

Interest rates are generally higher on interest only loans. Paying down a portion of the principal loan each month, means that you will actually pay less interest over time

• Lower overall repayments

Investors can really feel the pinch when the loan reverts back from interest only, to principal plus interest. When your interest only period finishes, your monthly repayments will be higher for the remaining length of the loan.

• Building Equity

When you start to pay off the principal and your property’s value grows, your equity increases. This can allow for funds for renovations or even another investment property.

Don't forget about de-risking!

Paying P & I can really help insulate you in a property market slump or de-valuation.

Is your interest only period almost over?

Find out more about making principal and interest repayments from our Finance Partner.

Contact us on propertyloans@realrenta.com and we will arrange for an investment lending specialist to call you.