How You Can Pay Off Your Loan Sooner and Save Thousands

By Mary Nebotakis, B. Eco, Dip. Financial Services, Managing Director, Natloans

On February 19, 2025, the Reserve Bank of Australia (RBA) made a crucial decision to reduce the official cash rate by 0.25%. For many Australian homeowners, this means their mortgage interest rates will also decrease. While the natural reaction might be to reduce repayments and enjoy extra cash flow, there’s a smarter move that could save you years on your loan and tens of thousands of dollars in interest.

By keeping your repayments at the same level despite the rate cut, you can dramatically shorten your loan term and build equity faster. Let’s break it down with real numbers.

The Power of Keeping Your Repayments Steady

Imagine you have a $500,000 home loan with a 30-year term at an interest rate of 6.25% per annum. Before the rate cut, your monthly repayment would be approximately $3,062.

Now, after the RBA’s 0.25% rate reduction, your lender lowers your interest rate to 5.95% per annum. If you chose to reduce your repayments in line with this new rate, your new monthly payment would be lower.

But here’s where the magic happens: instead of lowering your repayments to the new minimum monthly repayment of $2,982, you keep them the same at $3,062 per month.

Note: The information provided by the calculator is intended to provide illustrative examples based on stated assumptions and your inputs. Calculations are meant as estimates only and it is advised that you consult with a mortgage broker about your specific circumstances. Financial Calculators © Vision Abacus Pty Ltd 2025

The Results

By keeping your repayments unchanged, you would:
✅ Pay off your mortgage 2 years sooner
✅ Save approximately $75,000 in interest over the life of the loan

That’s two years of mortgage-free living and a massive reduction in interest costs – all without spending a cent more than you already budgeted for!

Why This Strategy Works

This approach works because your extra payments directly reduce the principal balance of your loan, rather than just covering interest. As a result:

• More of your payment goes toward the loan itself – shrinking your balance faster.
• You reduce the overall amount of interest paid, since interest is charged on a smaller balance over time.
• You build home equity faster, giving you more financial flexibility down the track.

The Bigger Picture: Long-Term Financial Benefits

1. Less financial stress later on – The sooner you pay off your mortgage, the more financial freedom you’ll have in retirement.
2. More borrowing power – A smaller loan balance improves your credit position if you ever need to refinance.
3. Flexibility when needed – By getting ahead on your loan, you create a buffer in case of unexpected financial changes. Extra repayments can then be accessed through available redraw

What Should You Do Next?

If you’re unsure whether this strategy is right for you, or you’d like to explore other ways to get ahead on your home loan, Natloans can help.

Our expert mortgage brokers can:
✔ Assess your current home loan and help you optimise your repayments
✔ Compare refinancing options to ensure you’re getting the best deal
✔ Develop a plan to help you become mortgage-free sooner

Take Action Today

With interest rates dropping, now is the perfect time to take control of your financial future. Contact Natloans today to discuss your options and start making the most of lower rates!

By Mary Nebotakis, B. Eco, Dip. Financial Services, Managing Director, Natloans

In today’s competitive Australian property market, traditional bank financing isn’t always the ideal solution for every borrower. Private mortgages and non-bank lending have become increasingly popular alternatives, offering valuable solutions for those who may not fit conventional lending criteria or need rapid property funding.

Understanding Private Mortgages

Private mortgages, also known as private lending, non-bank loans, or alternative property finance, are loans provided by private individuals or specialist lending companies rather than traditional financial institutions like the Big Four banks or credit unions. These loans are secured by real estate, making them an attractive option for both lenders and borrowers in the Australian market.

How Private Mortgages Work

Unlike conventional mortgages, private mortgages operate on a more flexible lending model. The private lender evaluates the property’s value and potential rather than focusing primarily on serviceability or strict lending criteria. This security-focused approach often results in faster approvals and more adaptable terms, particularly valuable in Australia’s dynamic property market.

Key Benefits of Private Mortgages

1. Rapid Approval Process

Private mortgages typically offer significantly quicker approval times compared to traditional bank mortgages. While bank loans might take 4-6 weeks to process, private funding can often be approved within days, perfect for time-sensitive property opportunities.

2. Flexible Lending Criteria

Private lenders can be more accommodating with their requirements. They may consider applications from:

• Borrowers with impaired credit
• Self-employed individuals with complex tax structures
• Property developers and investors
• Foreign buyers and temporary residents
• Those with ATO debt or previous defaults

3. Customisable Terms

Private mortgage terms can be tailored to meet specific borrower needs, including:

• Interest-only payments
• Shorter loan terms
• Flexible repayment schedules
• Creative deposit solutions
• No mortgage insurance requirements

Common Use Cases in Australia

Private mortgages are particularly valuable in several scenarios:

Bridging Finance

When timing is crucial between property settlements, private mortgages can provide short-term funding to bridge the gap, especially common in hot Australian property markets.

Property Development

Developers and investors looking to acquire, renovate, or develop properties often find private funding ideal for their short-term financing needs, particularly for projects that traditional banks consider too complex.

Time-Critical Purchases

In competitive markets, like the capital cities in Australia, having quick access to financing can make the difference in securing a desirable property or winning at auction.

Important Considerations

While private mortgages offer numerous advantages, borrowers should be aware of certain factors:

Higher Interest Rates

Private lenders typically charge higher interest rates than traditional banks to compensate for increased risk and greater flexibility.

Shorter Terms

Most private mortgages are designed as short to medium-term solutions rather than long-term financing options, typically ranging from 6-24 months.

Professional Guidance

Working with experienced mortgage professionals is essential to ensure the terms and conditions align with your investment strategy and exit plans.

Partner with Natloans for Your Private Funding Needs

At Natloans, we understand the unique challenges of the Australian property market. Our experienced team specialises in connecting borrowers with private mortgage solutions that match their specific requirements.

Whether you’re a developer seeking construction finance, an investor looking for quick settlement, or a homeowner exploring alternative lending options, we’re here to help you navigate the private lending landscape.

Contact our mortgage experts today to explore how private mortgage financing can help you achieve your property goals. Our team will guide you through the process, explain your  options, and help you secure the funding you need with terms that work for you.

Looking to learn more about private lending options? Lodge an inquiry online today or call our team for a confidential consultation about your property finance needs.

By Mary Nebotakis, B. Eco, Dip. Financial Services, Managing Director, Natloans

When choosing a home loan, one of the biggest decisions you’ll face is whether to opt for a fixed or variable interest rate. Your choice can significantly impact your financial stability and flexibility. Fixed-rate home loans provide the certainty of unchanging repayments, but are they always the best option?

Let’s explore the pros and cons of fixed-rate home loans and key factors to consider before making your decision.

Pros of Fixed-Rate Home Loans

1. Predictable Repayments

With a fixed-rate loan, your interest rate remains constant for a set period—typically between 1 and 5 years. This means your repayments won’t change, making it easier to budget and plan.

2. Protection Against Interest Rate Increases

If market interest rates rise, your repayments stay the same, shielding you from unexpected cost increases. This can be especially beneficial during periods of economic uncertainty or when interest rates are expected to climb.

3. Financial Peace of Mind

Fixed-rate loans provide certainty and stability, allowing you to focus on other financial goals without worrying about fluctuating repayments. This can be particularly helpful for first-time homebuyers or those managing tight household budgets.

Cons of Fixed-Rate Home Loans

1. Limited Flexibility

Fixed-rate loans often come with restrictions on extra repayments, meaning you may face penalties if you want to pay off your mortgage faster. Some lenders impose strict limits on additional repayments or charge fees for making them.

2. Missed Savings Opportunities

If variable interest rates drop, borrowers on fixed-rate loans won’t benefit from lower repayments. This means you could end up paying more than necessary if market conditions shift in favour of lower rates.

3. Break Costs and Exit Fees

Breaking a fixed-rate loan before the term expires can result in high fees. If you decide to refinance, sell your home, or pay off your loan early, you may face significant break costs, making it harder to adjust your financial strategy.

Key Considerations Before Choosing a Fixed Rate

1. Choosing the Right Term Length

Fixed-rate terms typically range from 1 to 5 years. A shorter term provides more flexibility but may result in higher rates when it’s time to refinance. A longer-term locks in certainty but could mean missing out on lower rates in the future. Finding the right balance is essential.

2. Exploring Split Loan Options

A split loan allows you to divide your mortgage into two parts—one with a fixed rate and the other with a variable rate. This offers the best of both worlds: stability in one portion of your loan and flexibility in the other.

3. Considering Market Trends

Understanding current economic conditions and lender offerings can help you make a more informed decision. For instance, recent rate reductions from banks and other lenders could influence whether fixing your rate is the right move now or if waiting could be beneficial.

Is a Fixed-Rate Loan Right for You?

Ultimately, whether a fixed-rate loan is the best choice depends on your financial goals, risk tolerance, and long-term plans. If you value certainty and want to safeguard against rising interest rates, a fixed-rate home loan could be a great fit. However, if flexibility and potential savings are your priorities, a variable or split loan might be a better option.

At Natloans, we understand that choosing the right home loan can feel overwhelming. Our team of experts is here to guide you through the decision-making process, ensuring you find a loan strategy that aligns with your needs.

Contact us today to explore your home loan options and secure the best solution for your financial future.

By Mary Nebotakis, B. Eco, Dip. Financial Services, Managing Director, Natloans

Refinancing your mortgage can deliver substantial savings, especially if you secure a lower interest rate. Even a small reduction of 0.5% or 1.0% can significantly decrease your monthly repayments and overall loan costs. Curious about the impact? Let’s break it down with real-world examples and provide you with a simple five-step checklist to get started on your refinancing journey.

How Much Could You Save?

Refinancing your home loan could lead to significant savings, as shown by the following examples.

Under Scenario A, refinancing from a 7.11% interest rate to 6.11% (a 1.0% reduction) could save $330 per month for a $500,000 loan, $495 per month for a $750,000 loan, and $661 per month for a $1,000,000 loan. Over 30 years, these savings amount to $118,800, $178,200, and $237,960 respectively.

Under Scenario B, a smaller reduction from 6.61% to 6.11% (0.5%) still offers notable savings, with monthly reductions of $165, $247, and $331 for loans of $500,000, $750,000, and $1,000,000. Over the life of the loan, this translates to savings of $59,400, $89,010, and $119,160 respectively.

Even minor rate adjustments can yield substantial financial benefits. Contact Natloans today to explore how much you could save!

5 Steps to Organising Your Refinance

Refinancing can feel daunting, but with a clear plan, it’s simpler than you think. Follow these five steps to make your refinance smooth and stress-free:

1. Evaluate Your Current Loan

• Review your loan’s interest rate, fees, and remaining balance.
•  Check for exit fees or penalties for early repayment.

2. Research the Market

• Compare current interest rates from different lenders.
• Use a mortgage calculator to see how different rates affect your repayments.

3. Consult a Mortgage Broker

• Brokers like Natloans provide expert guidance and access to competitive loan products.
•  They can help you find the best lender to suit your financial goals.

4. Organise Your Documents

• Gather proof of income, expenses, and details of your current loan.
• Make sure your credit score is in good standing to improve your chances of approval.

5. Apply and Transition

• Once approved, your new lender will handle paying out your existing loan.
• Carefully review the new loan terms to ensure there are no hidden surprises.

Why Refinance with Natloans?

At Natloans, we’re dedicated to helping you maximise your savings and achieve financial freedom. Whether you’re seeking a lower interest rate or consolidating debt, our team of skilled brokers will guide you through the process to ensure you secure the best deal. Contact us today to explore your refinancing options and start saving!

5 Steps to Protecting Your Wealth: Safeguard Your Family and Your Loans

By Mary Nebotakis, B. Eco, Dip. Financial Services, Managing Director, Natloans

When taking out a home or investment loan, most people focus on getting the best rates, finding the right property, and planning their future. But one crucial aspect of financial management often gets overlooked: protecting your ability to maintain these assets in the face of unforeseen life events. Whether it’s illness, injury, or even worse, the unexpected can put immense pressure on your financial stability.

Here are five key steps to help you protect your wealth and secure your financial future:

1. Income Protection Insurance

Your income is the cornerstone of your ability to repay your debts. Without it, you may struggle to keep up with loan repayments. Income protection insurance provides a safety net by replacing a portion of your income if you’re unable to work due to illness or injury. It’s an essential part of protecting not just your loan but also your lifestyle.

2. Life Insurance

Life insurance ensures that your loved ones won’t be left burdened with debt in the event of your passing. If you have a mortgage or other significant financial obligations, life insurance provides peace of mind, ensuring your family can stay in their home or keep their investments intact.

3. Total and Permanent Disability (TPD) Insurance

While income protection helps during temporary illness or injury, TPD insurance covers you in the event of a permanent disability that prevents you from ever returning to work. This type of coverage ensures you can meet your financial commitments and maintain your quality of life, even if you can no longer earn an income.

4. Trauma Insurance

Major health issues like cancer, heart attack, or stroke can cause significant financial stress, especially if it affects your ability to work. Trauma insurance provides a lump sum payment to cover medical expenses, loan repayments, or any other financial burdens during recovery.

5. Engage a Risk Insurance Specialist

Navigating the complexities of risk insurance can be overwhelming, especially when you’re managing loans and other financial responsibilities. If you don’t currently have a financial planner or risk insurance specialist, Natloans can assist you in finding the right professional to help ensure you’re adequately protected.

Get Started on Protecting Your Wealth

Taking out a loan is a significant financial commitment, and it’s crucial to plan for the unexpected.

Through a strategic partnership with a professional and trusted financial planning practice, we can help ensure peace of mind, by arranging an obligation free review of your risk and life insurances, considering your current and future needs with our partner.

If you’d like assistance to see how you can protect yourself, your family and your wealth through taking out the right level and type of insurance, or would like to arrange an obligation free review of your current insurances, call us on 1300 955 791, or email the team at homeloans@natloans.com.au, and our team will arrange this for you.

If you haven’t yet considered this vital aspect of financial management, now is the time to act.

Disclaimer: The information provided in this newsletter is for general informational purposes only and should not be considered financial or legal advice. Natloans is not a financial advisor, and we recommend seeking the assistance of a licensed financial planner or insurance specialist before making any decisions regarding financial protection strategies. Any insurance solutions or products mentioned are to be discussed with an appropriately qualified professional to determine their suitability for your personal circumstances. Natloans accepts no liability for decisions made based on the information provided herein.

Grow Your Wealth with SMSF Loans

By Mary Nebotakis, B. Eco, Dip. Financial Services, Managing Director, Natloans

Investing through a Self-Managed Super Fund (SMSF) is an increasingly popular way for Australians to take control of their retirement savings. One of the most powerful investment strategies available within an SMSF is property investment through SMSF loans. At Natloans, we’re experts in both residential and commercial SMSF lending, helping clients leverage their super funds to grow their wealth.

What Is an SMSF Loan?

An SMSF loan allows your super fund to borrow money to invest in property. With the right financial advice and structure, this can be a highly effective way to build a diversified investment portfolio within your super fund. Whether you’re considering residential property or commercial real estate, SMSF loans provide flexibility and opportunities for long-term growth.

Residential SMSF Loans

Residential SMSF loans give you the opportunity to invest in residential property, such as rental homes or apartments, through your SMSF. With the right investment, you can generate rental income and capital growth, which is directed back into your super fund.

• Tax Benefits: Residential SMSF loans benefit from the concessional tax rates applied to superannuation. This means you pay a reduced rate on rental income and capital gains.
• Long-Term Investment: Property typically appreciates over time, offering the potential for significant returns when you retire.
• Control Over Investments: By using an SMSF, you have direct control over the property you purchase, ensuring it aligns with your investment strategy.

Commercial SMSF Loans

If you’re a business owner or property investor, commercial SMSF loans offer a range of benefits. With a commercial loan, your SMSF can purchase business premises, allowing your super fund to accumulate wealth while your business enjoys stable occupancy.

• Business Benefits: Owning your business premises through your SMSF can be highly advantageous. Your super fund pays the mortgage while your business occupies the property, creating a dual benefit for both your business and your retirement fund.
• Diverse Investment Options: Commercial properties often offer higher rental yields and longer leases compared to residential investments, making them attractive for SMSF investors looking to diversify.
• Tax Advantages: Like residential SMSF loans, commercial loans also benefit from super’s concessional tax rates.

Why Use SMSF Loans?

SMSF loans can offer a range of benefits, making them a powerful tool for building your retirement savings:

• Leverage: Borrowing through an SMSF allows you to invest in high-value properties, using your super fund’s existing balance as a deposit.
• Tax Efficiency: Superannuation is subject to lower tax rates, allowing you to maximise the returns from rental income and capital growth.
• Long-Term Asset Growth: Property is a stable investment, known for appreciating over time, making it ideal for retirement planning.

Why Choose Natloans?

At Natloans, we are experienced in SMSF lending, offering tailored solutions for both residential and commercial property investments. With years of experience and a deep understanding of SMSF regulations, we’ll guide you through the entire loan process, ensuring compliance and helping you make informed decisions about your financial future.

We know the complexities of SMSF borrowing, and we’re here to make the process smooth and stress-free. Whether you’re new to SMSF loans or an experienced investor, our team will work with you to achieve your investment goals.

Contact Natloans Today

Ready to take control of your super and invest in property?

Contact the team at Natloans today to learn more about how we can help you with SMSF loans for both residential and commercial properties.

Our team of experts is here to answer your questions and guide you every step of the way.

By Mary Nebotakis, B. Eco, Dip. Financial Services, Managing Director, Natloans

As we move through 2024, there is considerable interest in where interest rates are headed, particularly for home loans, car loans, and personal loans. In this newsletter, we’ll explore the current economic outlook, how it might impact interest rates, and discuss the pros and cons of opting for a fixed-rate home loan in today’s market.

Interest Rate Outlook: What to Expect?

Home Loans: Cautious Optimism with Potential for Stability

With the latest economic data showing modest GDP growth and mixed inflation signals, the Reserve Bank of Australia (RBA) has taken a cautious approach to its interest rate policy. While inflation remains above the RBA's target range, recent signs of easing underlying inflation suggest that the central bank may pause further rate hikes in the short term to assess their impact on the economy.

For home loan borrowers, this means that while rates may stabilise soon, there remains a risk of further increases if inflation does not continue to decline as expected. Variable rates may remain relatively stable for now, but any unexpected economic developments could quickly change that scenario.

Car and Personal Loans: Rates May Remain Steady, but Caution is Advised

Interest rates for car and personal loans are generally influenced by broader economic trends and the cash rate set by the RBA. Given the current economic outlook, these rates are also expected to remain relatively stable in the short term. However, lenders may adjust their rates based on changes in the cost of funding, market competition, or credit demand. It is essential for borrowers to stay vigilant and explore their options.

Fixed Rate Home Loans: Should You Lock in Now?

In today’s uncertain interest rate environment, many borrowers are considering fixed-rate home loans to manage their repayments. Here are the pros and cons of fixed-rate loans to help you make an informed decision:

Pros of Fixed Rate Home Loans:

1. Certainty of Repayments: With a fixed-rate loan, your interest rate and repayments are locked in for a set period (typically 1 to 5 years). This provides peace of mind and allows you to budget effectively, knowing that your repayments won’t increase during the fixed term.

2. Protection Against Rate Increases: If interest rates rise during your fixed-rate period, you’re shielded from these increases, potentially saving you money compared to a variable-rate loan.

3. Easier Financial Planning: Fixed repayments make it easier to plan your finances, particularly if you are on a tight budget or prefer stable and predictable expenses.

Cons of Fixed Rate Home Loans:

1. Limited Flexibility: Fixed-rate loans often come with restrictions, such as limited ability to make extra repayments or higher fees for early repayment. If you plan to sell your property or refinance within the fixed period, you could face break costs, which can be substantial.

2. Potential to Miss Out on Rate Drops: If interest rates fall, you won’t benefit from lower rates until your fixed term expires. This could result in higher repayments than you would have with a variable-rate loan.

3. Higher Initial Rates: Fixed rates are often slightly higher than variable rates at the time of locking in, as lenders build in a premium for the certainty they provide. This means you could start paying more than you would on a variable loan.

Is a Fixed Rate Right for You?

Whether a fixed-rate loan is right for you depends on your individual circumstances, including your financial goals, risk tolerance, and whether you value certainty over flexibility. If you prefer to know exactly what your repayments will be and are comfortable with the conditions, fixing your rate could be a wise decision. However, if you think rates might fall or you want more flexibility in managing your loan, a variable rate or a split loan (part fixed, part variable) may be more suitable.

Need More Information? We’re Here to Help!

At Natloans, our team of experts is here to help you navigate these decisions and find the loan that best suits your needs. Whether you are considering fixing your home loan rate or exploring car and personal loan options, we can provide personalised advice to help you make the most of the current market conditions. Please don’t hesitate to contact us today to discuss your options. We’re here to support you every step of the way.

Unlock Savings Now with Natloans Home Loan Review Service!

At Natloans, our mission is to empower you on your journey to financial freedom and security. With the current economic landscape constantly evolving, now is the time to ensure you’re getting the best deal on your home loan, and not paying more than you need to.

Introducing Natloans’ Home Loan Review Service – your gateway to potential savings and the right home loan advice. Our expert team is dedicated to scouring through offerings from over 40 lenders to find the perfect fit for your unique needs. Here are the top three reasons why now is the time to take advantage of this opportunity:

Maximise Savings: Interest rates fluctuate, and what may have been a competitive rate when you first secured your home loan could now be costing you more than necessary. Our Home Loan Review Service allows you to explore the current market offerings, potentially unlocking significant savings by securing a better rate.

Tailored Solutions: Your financial situation and goals may have evolved since you first obtained your home loan. Whether you’re looking to lower your monthly payments, shorten your loan term, or access additional features, our team will work tirelessly to tailor a solution that aligns perfectly with your current circumstances.

Expert Guidance: Navigating the intricacies of home loans can be daunting, but you don’t have to do it alone. With Natloans’ experienced professionals by your side, you’ll gain access to expert guidance and personalised advice every step of the way. We’ll demystify the process, answer your questions, and ensure you feel confident in your financial decisions.

Act Now

Don’t let the opportunity for potential savings and enhanced financial well-being pass you by. Act now and let Natloans’ Home Loan Review Service secure the best deal for you before the fiscal year ends.

To schedule your complimentary home loan review or to learn more about our services, simply reply to this email or give us a call at 1300 955 791. The right time is now, so seize this chance to maximise your savings and achieve your financial goals today!

Thank you for choosing Natloans. We look forward to helping you achieve your homeownership dreams and financial goals.

From Mary Nebotakis, Managing Director.

So, you’re an aspiring property investor. Where to start? is it best, for the sake of investment, to purchase a house, or a unit/apartment? In this article, the pros and cons of each will be examined in as objective a manner as possible, and the question will be left to the intelligent reader to answer, on the basis of the knowledge which has here been presented.

All About Appartments

• Ease of Entry – The fact of Appartments being the cheaper option means that for the novice investor, it is easier to enter the market through the purchase of such a property. This allows one to gain a foothold in a particular area, or, at least, secure a modest investment through the ownership of property. Although an apartment will almost never appreciate to the degree at which a house will, the fact remains that there is great benefit in having a foothold in the market by most any means.

• Potential for Appreciation – As previously mentioned, an apartment is highly unlikely to appreciate to the degree at which a house will. That said, the level of appreciation is nothing to dismiss, with an apartment of good quality potentially possessing the ability to increase by a quarter in value through the course of but five years. This is amplified by conditions such as sought after, inner-city locales, the purchase of which is generally only made possible to the average buyer by virtue of the property size being smaller. Another facet which could increase the appreciation and value of an apartment is if it is period; should an apartment be Victorian, or Art Deco, for example, the demand for and value of the property will increase exponentially with the years, and, in fact, increase by virtue of the years themselves.

• Access to Locale – As touched upon in the last point, an apartment can be a desirable property with potential for appreciation by virtue of the fact that many thereof are located in highly desirable and trendy areas. Apartments are usually to be found in the inner-city or inner suburbia, and are, therefore, closer to most forms of entertainment, night life, work and offices, facilities and resources. For most people, a home in this tantalising locales is only made possible by the fact that they come in the form of smaller, more affordable appartments, which will increase in value as the population of any given city rises.

How About Houses?

• High Appreciation – The fact of the matter is; houses will always appreciate more than apartments. This is because the value of a house comes not only from the structure itself, but also from the land upon which the structure is built. Think of it this way; new apartments are built every day, but no one can create more of the green Earth upon which they’re built. Therefore, it is the land itself which is the more scarce resource, and not the buildings. Naturally then, it will be the houses, which can double their value in a decade, that are more prone to appreciation in price.

• Renovation Friendly – As mentioned, when one purchases a house, one has purchased the land. This means that one has freedom to extend or shorten the buildings length, build a pool or playing field, or add a second story to their home so long as they have the money, stay on their property and are in line with their local council. With an apartment, such is not the case. One does not have the freedom to take down walls and make great structural changes, even to the property which they, themselves own, due to the fact that the body corporate which dictates the “nays” and “yays” within the complex are likely to veto anything potentially disruptive to other residents. Therefore, in the instance one renovating, and being able to turn a house you like into a home you love; houses win the day.

• Difficulty of entry – For all the benefits which houses have over apartments, one fact still lingers; the price. A house will almost always cost more than an apartment, and as such, the purchase thereof can be daunting to aspiring investors and home-owners alike. Even so, the seemingly impossible becomes ever more achievable when one shifts their focus for the bright lights of the inner city, and into the sleepy haze of outer suburbia. In some cases, and in many cities, a three bedroom house in the outer suburbs can cost as much as a one-room apartment in the inner-city. Think of what could be saved! And when one considers the potential for appreciation? The mind runs wild with the possibilities.

Conclusion

Therefore, it can be rightly said that to different people, in different circumstances, units, apartments, and houses all have different benefits and drawbacks. No matter what your situation or preference is, however, its unlikely that you’ll be able to bear the cost without a home loan. If you’re looking to buy a home, be it an apartment or a house, Natloans is only a phone call away. Out dedicated home finance team has, over many years, helped hundreds of Aussies into their dream homes, of all shapes, sizes, and categories. Call us today! Its all that stands between you, and your new home.

The First Distinction

Right off the bat, let’s discuss the functional difference in the two property investment types. Commercial properties are properties in which commerce is supposed to go underway, hence, they are meant for the use of a business, primarily.

Residential properties are properties in which one intends to live or have someone live. Hence, they are a place of residence.

Practical Distinctions

Here are some of the more tangible differences between the two sorts of property investment, in no particular order:

• Lease Terms & Length – Commercial properties will often have a much longer lease than residential properties, due mainly to the fact that it is much harder to find a tenant for a commercial property than a residential one. One will also note that, distinct from residential properties, commercial properties have lease terms which tend to vary quite widely, and are subject to quite a wide scope of negotiation.

• Maintenance – With residential properties, the price of electricity, plumbing, land tax and rates are usually billed to the landlord rather than the tenant, with commercial properties, the opposite is often the case. Therefore, in a commercial property, the tenant will usually bear the burden of maintenance. At the same time, this provides the commercial tenant with an incentive to take closer care of the property, not just because they will have to pay the upkeep thereof, but also because it is their place of business and often the success thereof is contingent upon its good appearance.

• Rent increase – Whilst most residential leases do not tend to include a fixed annual rent increase, commercial properties often do. This is typically within the range of 3-4% annually.

• Risk – Residential properties are usually considered to be the safer investments of these two. No matter what is ongoing with the economy; people will always need a place to live, whilst commercial properties, on the other, can be subject to some quite significant shocks and tremors when faced with economic shocks.

• Interest – Interest rates paid on properties tend to be significantly higher in the commercial realm. This is partly because an institution is presumed to have more money for payment than an individual or unit thereof.

Finishing Thoughts

This was a basic summation of the key differences in the two property types. Some information may be specific to the property in question, and there are other minute details which have not been discussed here. It is best, therefore, to see this as a starting point, and to make sure to do your own research to the best of your abilities if either of these matters of subject piques your interest. For more information, check out our homes loans section. See you soon!