No monthly interest payments: how prepaid interest works for property developers
Back to Blog 26 October 2026 4 minute read
For property investors and developers, cash flow often matters as much as the overall numbers. Monthly interest payments add pressure, particularly when a project is generating little or no income.
CrowdProperty’s residential investment, residual stock and pre-development loans are structured with interest prepaid and held within the facility, so there are no monthly interest payments to meet from your own funds. The interest is still payable, it is simply funded from the loan.
How prepaid interest works
Interest for the full loan term is set aside within the facility at settlement and paid from that amount.
As the prepaid interest forms part of the loan, less of the facility is available for other costs. It is worth factoring in when working out how much funding your project needs.
Where it can help
Residual stock. When a project completes with units unsold, a residual stock loan refinances the completed stock and gives you more time to sell, rather than reducing prices as the construction loan nears expiry. With no monthly interest payments, there is less pressure on cash flow while units are on the market.
Pre-development. Planning, approvals and consultant fees usually need paying before construction finance is in place. A pre-development loan with prepaid interest removes monthly interest payments during this stage.
Residential investment. For completed residential property, there is no need to meet monthly interest payments from rental income or other funds during the loan term.
The terms
Loans are available up to $7.5m, with larger loans up to $35m considered. The maximum loan-to-value ratio (LVR) is 70% in metro areas and 65% in non-metro areas. Rates start from 9.25% and terms run from 12 to 36 months.
About CrowdProperty
CrowdProperty is a specialist property lending platform focused on SME residential development finance. CrowdProperty Australia funded its first project in 2021 and has since completed 21 projects, returning 100% of capital and interest to investors.
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