17 May 2021

Do I Still Make Repayments on my Investment Loan When I Have No Tenants?

Interest Only Home Loan: Understanding the Basics

Yes. You still need to make payments on your investment loan even if you do not have tenants. Otherwise, you may be at risk of defaulting on your loan. This loan default could result in the bank selling your property to recoup the debt. Even before the Coronavirus pandemic, banks considered some investment properties, such as apartments, high-risk loans, because of fluctuating demand. Now with unemployment soaring and people either moving out of apartments or being unable to afford rent, those who own the buildings find it difficult to repay the investment loans. There may be a few options available to help you repay your investment loan even without investment income.



If you own a home, you may be able to refinance your home mortgage to free up resources and equity to pay back loans for your investment property. However, refinancing your home leaves you with a home loan to pay off. Some lenders may allow you to refinance your investment loan to borrow money from your accumulated equity. This option also poses a risk by drawing out the loan length.


Interest-only payments

Suppose you are having difficulty making payments on your principal loan. In that case, your lender may allow you to switch to cheaper, interest-only payments if you have paid off a significant portion of your principal already. 


Deferring payments

This is a new option provided by some lenders due to the economic problems caused by COVID-19. If you fit the criteria, you can defer your repayments for up to six months. This option should be a last resort. Your principal loan amount will still accrue interest during the deferment period, which the lender will add to the remaining loan balance. 


Paying off your investment loan without any tenants is difficult, but there are options available. Mortgage House is a non-bank lender specialising in atypical loans. Our team of mortgage experts and brokers can help you refinance your investment loans and offer you payment plans until you are once again financially secure.

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