Borrow up to 95% of the purchase price of your dream investment property
The RAMS Investor Home Loan offers customers a way to enter the investment property market with very little deposit required. It also allows investors to benefit from a low variable interest rate.
Things to consider about the RAMS Investor Home Loan
With a maximum loan-to-value ratio (LVR) of up to 80% without lenders mortgage insurance, investors can get closer to their dream of owning another property. RAMS will even extend this up to 95% of the purchase price of the property, although this is subject to certain conditions.
In addition, the RAMS Risk Fee, which covers RAMS in the event you default on your home loan can be added or 'capitalised' onto the total cost of your loan.
Features and inclusions
The RAMS Investor Home Loan is able to be set to "Interest-Only" repayments for up to 10 years. As long as the Interest-Only option is set initially for the first five years, you are able to extend the term for Interest-Only payments for a further five years after this point.
This allows you to cover only the interest portion charged to the loan, without needing the extra cash to cover the principal portion of a normal mortgage payment. If you are investing, this can also be advantageous for tax purposes, as it allows you to put any excess cash flow into your own non-deductible mortgage on the family home first.
Always discuss investing options with your accountant to ensure you’re setting up your finances in a way that is suitable for your own financial goals and personal situation.
Acceptable loan purposes
You are able to use this particular home loan to purchase an existing property for investment purposes. Investors may also use this home loan for refinance purposes to help reduce the amount of interest paid on outstanding mortgages held with other banks. It’s also acceptable to use this loan to construct a new property on vacant land.
Fees and charges
- Application Fee - $595
- Account-Keeping Fee - $0 per month
- Loan Settlement Fee - $285
- Valuation Fee - $0 per property (1st valuation is free)
Lender’s Mortgage Insurance
RAMS Home Loans don’t call their LMI premiums “Lender’s Mortgage Insurance” as mentioned above. Instead, they will charge a “RAMS Risk Fee” for any loan exceeding 80% LVR for loans under $1.5 million.
Repayments on an Interest-Only home loan are calculated daily and shown as a total figure at the end of the month. This means the minimum payment due each month is the accumulated interest figure.
RAMS Home Loans are able to directly debit the amount due for the interest payment from a regular transaction account once every month, usually on the monthly anniversary of the original settlement date.
It’s also possible for customers to arrange payment to be made by salary credit, where the payroll person for an employer can directly credit a payment from a regular salary. Payments may also be made by BPAY.
Customers are encouraged to make extra repayments voluntarily whenever they desire. This can be done electronically by transferring funds into the loan account via Internet Banking, or by Phone Banking.
Any extra payments paid into the mortgage account over and above the minimum Interest-Only payment required may be redrawn at any time.