www.rentagain.nz   >   viability  >  Calculator Interest and renting Interest is a portion of rent.  It hires the money needed to buy, and hold, a renter's home.  Rental homes need to pay at least the same interest as other investments pay for borrowing peoples' savings. EXAMPLE:  At 5.2% interest rate, investment companies  pay $100 weekly ($5,200 pa) for every $100,000 they  borrow. A $400,000 rental home* therefore, needs to pay  at least $400pw interest. (Remember rent must also pay for:-   ●  Operations, ●  Refurbishments and  ●  Renting tax) NOTE 1: If interest rates increase by 0.25%, interest cost for a $400,000 rental home increases over $19pw. NOTE 2: Higher risk requires higher interest payments. NOTE 3: Rental homes become less available when their interest returns are continually less than interest paid by other investments.   * Property values are available to view at  QV Valuations Calculator Top