1. Repay principal and interest rather than interest only from Day 1.

The current tighter lending is certainly forcing us, investors, to be more conservative. This means reducing overall debt levels by paying principal and interest from the start.

“It’s the most obvious move you can do,” says Boyle.

“This may not be such a bad thing for many borrowers as it results in more consistent loan repayments throughout the life of the loan. It’s also generally cheaper than starting off on interest-only.”

Syed warns that it’s important to plan for this step as the potential shock to your cash flow can be massive.

“This can be as much as a 25-30% jump in repayments when this happens,” he says. “The potential for this payment shock should be factored into your debt management strategies.”

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