If you own one to three investment properties, the last few months have probably shown up in your cash flow. The RBA raised the cash rate three times in 2026 — in February, March and May — lifting it from 3.60% to 4.35%, then held it at 4.35% at the June meeting (RBA, 16 June 2026). For investors on variable rates, those increases have already flowed through to repayments. The question many are now asking isn’t “where are rates heading?” — nobody knows that — it’s “is my loan still structured the way it should be?”
This article walks through the levers worth reviewing when rate movements have squeezed your returns. None of it is a recommendation to act — every portfolio is different, and the right move depends on your numbers, your goals, and a proper Requirements & Objectives conversation. Think of it as a checklist you can take into your own review.
Why a structure review matters more when rates move
A loan that suited your portfolio at settlement may not suit it now. Rate type, repayment type, offset and redraw settings, loan term, and even which lender holds the debt all affect your monthly position and your tax outcome. When the cash rate sat lower, small inefficiencies were easy to ignore. After three increases in a year, the same inefficiencies cost more in real dollars.
Reviewing structure isn’t about chasing the lowest headline rate. It’s about whether the way your borrowing is arranged still does what you need it to do.
Interest-only vs principal and interest
Many investors use interest-only (IO) periods to maximise deductible interest and preserve cash flow, particularly while they hold other non-deductible debt such as an owner-occupier mortgage. Others prefer principal and interest (P&I) to build equity faster.
Neither is universally “better.” The considerations include:
- Cash flow: IO repayments are lower during the IO term, which can help when yields are tight — but the principal still has to be repaid later, often at a higher monthly figure once the loan reverts to P&I.
- Tax position: interest on an investment loan is generally deductible, but negative gearing benefits depend on your individual circumstances. This is a question for your accountant, not your broker.
- IO expiry: if an IO period is ending, the revert to P&I is a real, date-driven event — worth understanding before it happens, not after.
Fixed, variable, or split
Rate type is the lever most investors think about first. Here’s what each actually gives you, without predicting what rates will do next.
| Rate type | What it gives you | The trade-off |
| Fixed | Certainty on repayments for the fixed term, whatever variable rates do | Limited extra repayments; break costs may apply if you exit early |
| Variable | Flexibility — offset, redraw, unlimited extra repayments | Repayments move with rate decisions, up or down |
| Split | A portion fixed for certainty, a portion variable for flexibility | You don’t get the full benefit of either — a middle path |
A fixed rate gives you certainty on repayments — valuable if predictable cash flow matters to your portfolio. Whether that certainty is worth the reduced flexibility is your call.
Offset accounts and redraw — are yours working?
An offset account linked to an investment loan can reduce the interest charged while keeping funds accessible. Used well, it can improve cash flow without permanently paying down deductible debt. Used poorly — or not at all — it’s a feature you may be paying for and not benefiting from. It’s worth checking whether your current loan has offset, whether you’re using it, and whether the structure aligns with your tax strategy (again, confirm the tax side with your accountant).
Loan-to-value ratio and equity release
Your loan-to-value ratio (LVR) is the size of your loan against the value of the property. As you pay down principal — or if a property has gained value — your LVR falls, which can open up options: a more competitive rate, the removal of lenders mortgage insurance considerations on future lending, or access to usable equity for the next purchase. A review can clarify where your LVR sits across the portfolio and what that makes possible.
Is your current lender giving you their best rate?
Lenders don’t always offer existing customers the same rate they advertise to new ones. This is sometimes called the “loyalty tax.” Reviewing what’s available across a wider panel — we work with 70+ lenders through AFG — gives you a factual comparison point. It doesn’t commit you to anything. It simply shows the gap, if there is one, between your rate and the market.
| Want a quick indication first? Our free Rate Review Tool takes about 60 seconds.
No login, no personal data stored — it shows the gap between your rate and the market (indicative only; actual savings depend on your circumstances). → Click here. |
Questions to ask yourself before you review
- How much has my monthly position changed across the portfolio since 2025?
- Is my rate type still right for how predictable I need my cash flow to be?
- Am I using offset and redraw, or paying for features I don’t touch?
- When do any IO or fixed periods expire — and do I know what they revert to?
- Has any property gained enough value to change my options?
Your call — and how to make it
There’s no one-size-fits-all structure for an investment portfolio. The right answer depends on your yields, your other debt, your tax position, and where you want the portfolio to be in five years. What a review does is give you the full picture across the market so the decision is an informed one.
Reviewing loan structure and rate type may help restore cash flow that recent increases have eroded. We give you the full picture — you decide whether to act on it.
| Book a free Portfolio Review.
Free, around 15 minutes, no obligation. One dedicated broker, start to finish. Call 1300 286 562. |
Your Rate, Your Choice, Your Call — That’s Unlocked.
