August 20, 2025

Luke on 2CC – Should my investment loan repayments be principal and interest? Is there a better option?

16 minutes

Financial Planner Luke Smith joined 2CC Talking Canberra in Money Matters, which aired live on Friday 15 August 2025. The topic for this week is: Should my investment loan repayments be principal and interest? Or is interest only the way to go? Luke is joined by Rod Henshaw, covering for Leon of 2CC to talk about how to best manage investment loans.

Thank you for joining us live on 2CC, YouTube or your favourite podcast streaming service with ‘The Strategy Stacker – Luke Talks Money’.

Key topics covered include:

What is the difference between principal and interest and interest only investment loan repayments?

A principal and interest repayment will be higher than an interest only repayment, even when the interest only loan rate is higher.

It pays to do the numbers in your own situation.

Understand how your cash flow can be impacted under both repayment approaches.

Is there another option to paying off an investment loan?

How might an offset account help with interest only loan repayments?

How do offset accounts work in paying off the investment loan?

What are the other benefits of using an offset account this way?

Is it easy to change from interest and principal repayments to interest only repayments and add an offset account?

Even though interest rates are falling, don’t think that a lower interest rate is always better – especially if you’re trying to manage cashflow and have the benefits of using an offset account, that is, access to your money.

Luke positively challenges listeners to structure their investment loans correctly and make the most of their financial resources.

The right solution depends on your personal goals and situation. Seek advice if you need help.

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Our podcast is also available on Apple Podcasts, Spotify and YouTube – ‘The Strategy Stacker – Luke Talks Money’

Is your investment loan structured correctly to help you make the most of your money?

A correctly structured investment loan can help you make more of your cashflow and you can still pay off the loan by using an offset account with interest only repayments. Seek advice if you need help to find the right approach for you.

Luke as a Financial Planner can help you set up a financial planning strategy to help you achieve your personal financial goals, including investment, super and retirement (including transition to retirement). Simply make an appointment to confidentially discuss your goals. Call Envision Financial Services on 6260 4749. You can use the contact us form to make an appointment, for a confidential discussion about your own goals and situation. Luke can also refer you to a mortgage broker should you wish to re-structure your loan or compare the market. Your current bank will never compare the market for you!

Luke will return to 2CC to talk about other ‘Money Matters’ next week, we hope you can join us. You can also catch up with ‘The Strategy Stacker – Luke Talks Money’ podcast at a time that suits you.

We look forward to your company again. Luke’s book Smart Money Strategy is out now.

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By Luke Smith