Interest only loans

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From: Bindi Cash


Interest only loans. How easy are they to get from banks over long periods of time. ie. 20 to 25 years.
 
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Reply: 1
From: Michael G


On 3/8/01 12:57:00 AM, Bindi Cash wrote:
>Interest only loans. How easy
>are they to get from banks
>over long periods of time. ie.
>20 to 25 years.

As far as I know, the "banks" are the only ones offering long term loans. Usually 10 years max. ANZ did have a 15yr IO fixed loan, but I don't think that exists anymore.

There was rumor that Bank of NZ was considering 20 or something fixed interest backed by an American source, but I have been unable to confirm it.

Its a good question, since we know they exist in the States (via books, etc) but it would be interesting to learn if they exist here in some form or another.

Even the possibility of using an overseas lender has the problem of currency changes, which would make the loan variable anyway but with greater differences in percentage rates.

That's my ramblings anyway.

Michael
 
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Reply: 1.1
From: Andrew _


Aussie Home Loans have a 20 year interest only loan - check their web site www.aussiehomeloans.com.au.

Regards
Andrew
 
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Reply: 1.1.1
From: Anthony C


Andrew,
I don't think its fixed, and what is the current bank bill rate?


AntC.GIF
 
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Reply: 1.1.1.1
From: Andrew _


Your are right - it is not fixed, it is linked to the 30 day bank bill rate eg Now 7.113% (Bill rate 5.763% +1.35% margin)and is capped at their standard variable rate.

Note: Even though I work at Aussie (IT dept) please don't take this as a sales pitch.

Andrew
 
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Reply: 1.1.1.1.1
From: Andrew _


Sorry - forgot to add that the rate is adjusted monthly on the 15th so the current rate used 5.673% was the rate as at the 15th Feb(I hope!).
 
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Reply: 1.1.1.1.1.1
From: Andrew Hawkins


The post was interest only not fixed.

A line of credit is a ongoing i/o loan through banks but not through originators. they have no set term (ie greater than 30 years) but most are only 80% lvr and the lowest rate I know of is 7.1%.

Andrew
 
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Reply: 1.1.2
From: Bindi Cash


hi Andrew,
I checked out Aussie home loans website and I am awaiting further information from them regarding the interest only loans that they offer.

Have you had first hand experience with aussie home loans. Most of my previous loans have been with banks. How do aussie home loans rate in the scheme of things.
 
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Reply: 1.1.2.1
From: Bindi Cash


Thanks guys for your response to interest only loans. It opens a real can of worms for me.

Getting my head around the idea of interest only loans has taken some time, however I do consider that my next investment property will be with such. I have a lot to learn in this department however i am coming to understand the implications of using funds from a cash positive rental situation and tax deductibles to be able to sustain the ownership of a property over a longer period of time to be able to eventually be able to sell such a property and thus gain on the capital growth.
My confidence is building in this area and I sure hope to establish my next investment property in this way.

Timing is the essence some people say.
Are there any comments with regards to the current situation on property in the Cairns area?
 
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Reply: 1.1.2.2.1
From: Andrew Hawkins


Hi Bindi,
No I haven't dealt with Aussie, I think that their I/O period is 5 years max, and their LOC's start to reduce their limit after 5 years also.
Check these items and compare their rates with the banks no frill type loans which have similar periods. 3-5 years max
 
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