In order to improve monthly cashflow on a property, one of the best methods used, is to convert your mortgage loan to an Interest Only Property Loan.
Example :
Traditional Capital and Interest Repayment Model
Bond R 50 million
Term 10 years
Interest Prime plus 1 % ( 11.25 % )
Repayment R 695 844 pm
Interest Only Model
Bond R 50 million
Term 5 years ( plus 5 years if account handled well)
Interest Prime plus 1 % ( 11.25 % )
Repayment R 468 750 pm
32 % Cash Flow Improvement – R 227 094 pm x 12 = R 2 725 128 pa
Loan Criteria
Loan To Value Maximum 75 %
Ownership 3 years minimum
Property Type Commercial and Industrial Properties
Vacancies Not more than 5 %
Interest Prime plus 1 % to Prime plus 3 %
Fixed Interest Option to Fix Interest Rate for 5 years.
Loan Values R 30 million to R 80 million
Advantages
Massive Cashflow Improvement
Unlock Capital – Equity to Cash
Turn Negative Cashflow into Positive Cashflow
Refinance Commercial Property Loan
Refinance Industrial Property Loan
Quick responses
General Notes
The interest only property strategy on commercial property is unique in South Africa. We facilitate your cashflow improvement strategy with an interest only payment scheme.
Interest Only Commercial Property Loans and Interest Only Industrial Property Loan are available, on commercial or industrial properties that have been owned for longer than 3 years.
Student Accommodation, Blocks of Flats, Hotels can also make use of Interest Only Property Investment Loans.
To secure a mortgage bond interest only, will require the same application process as a normal bond application BUT is a much quicker process.
Service only the debt portion of your commercial property loan. No premium to fix your interest rate
FAQ’s
Loan Values
R 30 mill to R 80 mill
How Quick
Approx 30 days from when all the documents requested, have been provided
Is there any risk to me
No, as long as you comply with all the terms and conditions of the mortgage bond agreement
Can I purchase a property using the Interest Only Mortgage Loan
Not at this time. It is only for existing property owners.
Is this applicable to homes
Sorry, no. Only commercial and industrial properties.
What types of property can be used
Warehouses, Shopping Centres, Factories, Hotels, Student Accommodation, Office Blocks, Apartment Blocks etc.
What is the advantage
Cashflow is immediately improved by approx 30 %
How long is the Interest Only Property Mortgage
5 years with option for another 5 years.
When do I pay the capital back
Within 5 years ( at end of 5 year term )
Can I extend the bond for more than 5 years
Yes, if the account is been well handled, it is possible for another 5 years.
How do I pay the capital back
By securing a bond from a normal banking institution