Can't fix rates under interest only period

[danwatto]

I had put in a request to fix interest rates on one loan.

The bank called me back today and said we're sorry you cannot fix as that fixed rate period would end after your interest only period ends.

So - they are only supporting fixed rates that end "within" the interest only period? If you only have 2 years to go on your interest only period, does that mean the only fixed period you can take is 1 year rates?

Seems crazy, is this all banks or just this one bank or one person being silly?

 

[Peter_Tersteeg]

I don't think the advice you're received is wrong. Another way to look at a fixed rate is, you're entering into a contract to pay $X for a period of $Y years. When a loan goes from I/O to P&I it violates this principal.

 

[Terry_w]

extend your IO period to match the fixed period!

 

[danwatto]

extend your IO period to match the fixed period!

I asked about that but they said I can't extend it unless it is close to the end of the fixed period

I had the option to speak to a supervisor but had to get back to work. Will try again next time.