The performance evaluation provides an excellent opportunity to review whether an investor’s current loan structure is working effectively. This stage of the process is usually carried out in consultation with the investor’s lender, Mortgage Broker and/or accountant.

Useful checkpoints include:

  • Is the interest rate competitive?
  • Is the loan structure still appropriate for the investor’s circumstances? Loans, whether fixed-rate, interest-only or principal and interest, should be reviewed for their suitability. For example, there may be circumstances where it is appropriate to split an investor’s loan into an interest only component and principal and interest component, despite the probable lack of tax deductibility on principal repayments.
  • Is the loan sufficiently flexible? Consider whether it allows the investor to switch between fixed and variable rates or to make lump sum principal payments.

Review the loan fees and charges and benchmark these against current financial market conditions. Assess these costs in the context of the investor’s other loans and financial commitments and in consultation with the investor’s accountant.