However, having said that, it is impossible to predict what new crisis, may spook the herd into action. If this happens, I suggest you may be best served by adopting a maverick attitude and not follow the herd. Property is long term, financial markets operate in cycles, the current tough times will only be temporary.

Rising unemployment could effect the value of House’s in the coming years. More Australians than ever are now employed on a casual basis or as subcontractors. They will be the first casualties of any big down turn in our economy and if they have bought homes in the last 5 to 6 years they may not have enough equity to help them ride out periods of unemployment. I suggest all casual employees and small business home owners look seriously at refinancing to interest only mortgages, for part or all of their home loan borrowing in these uncertain times.

The environment poses a different dilemma. Australia has a shortage of housing stock in areas where people want to live. To improve the situation the government has to sponsor a movement toward environmentally sustainable housing projects, taking into account the problems of water and transport. The internet and whatever is next will make communication and delivery of services more efficient, but people need drinking water and a way to get around without it costing them half of their incomes.

I am still bullish for property in all countries of the world. Individual house price’s may fall for a variety of reasons, but experienced investors know that the best time to buy property is when the market is weak. This year may be a good time to buy property if the basic fundamentals, including return on investment, are right.

I have always found it a good time to buy, when everybody is telling you that property is a bad investment. Now is the time to get set for the future. Don’t wait for the next boom to invest. Get set for the next boom and be one of those investors who pushes property to the next level by building and renovating this year. Create your own boom. Then when everyone else hop’s in and pushes the value of the properties up, you will be rewarded handsomely.

Refinance my home loan!

Tenants not paying on time or behind, unable to make your interest payment on your rental property loan?

Don’t use your own money, consider setting up an interest only line of credit allowing capitalisation of interest and use it to pay the interest on your principal investment property loan until you have sorted things out with your tenant or cash flow has improved. If you borrow to pay your interest, the interest on the line of credit will be tax deducible as well. The one proviso is that you genuinely have cash flow problems and are unable to pay the interest on your investment property home loan.

See your mortgage broker for details about interest only interest capitalised line of credit home loans. Remember treat your property investment as a business, not a hobby. Give it a chance to succeed, a ten year chance at least.

Major Australian Lenders.
Investment property home loans.
Interest only, one year fixed interest rate.

No comparison rates are supplied as the rate is for investment purpose only. Borrowing costs and other fees may be tax deductible over one or several years.

Lender, rate, max LVR with mortgage insurance, application fee, monthly service fee.

ANZ 8.34% 97% $600 $10

CBA 8.69% 95% $600 $8

NAB 8.69% 100% $600 $8

St George 8.54% 95% $600 $10

WESTPAC 8.69% 100% $750 $8

This is just a snapshot to give you an idea of what’s currently available, the terms and conditions of each loan are available from your mortgage broker or direct from the lender. Products may vary from lender to lender, but are for one year fixed, interest only, investment home loans advertised by the lender as at 21/09/2008. I think Interest Only Home Loan one year fixed rates compare favourably with the standard variable home loan rates of the major lenders and give the borrower some flexibility in times of mortgage stress.

Remember, your home loan funding is an important part of your plan to create wealth through property investment. Interest only home loans can give you the edge.