I know IO is probably best for investment properties, but I have been paying PI since I purchased as even though investment at the moment, current IP is intended to be PPOR one day (still a few years away yet though).
Now that I am trying to move towards IP2 with tight equity, would moving across to IO for this loan be particularly beneficial? Servicability is not my problem for a new loan, its the deposit. It looks like it might give me an extra $650 or so a month that I could save up, on top of the $400 or so extra I already put into it. I know that's $1k a month, but the $650 is not necessarily going to have a massive impact on savings per month if there are negatives I'm not aware of to this. And theoretically if it is paying principal down on the loan, it is improving my equity slowly anyway isn't it??
After the IO period, the repayments will be much higher, depending on how long it is for....how do you experienced investors manage this? Are your PPOR's IO? Anyone with experience past the 10yr IO max (or 15 if I call it an investment loan for the bank)...Do you take the full IO time offered? Can it be rolled into another IO loan? Same qn. for investments I guess, do they get rolled into IO again? I imagine it isn't as much of an issue as rents will have caught up to some degree with the increased repayments required in 15yrs time, but PPOR is a bit different and depends on wages at the time, etc.
Now that I am trying to move towards IP2 with tight equity, would moving across to IO for this loan be particularly beneficial? Servicability is not my problem for a new loan, its the deposit. It looks like it might give me an extra $650 or so a month that I could save up, on top of the $400 or so extra I already put into it. I know that's $1k a month, but the $650 is not necessarily going to have a massive impact on savings per month if there are negatives I'm not aware of to this. And theoretically if it is paying principal down on the loan, it is improving my equity slowly anyway isn't it??
After the IO period, the repayments will be much higher, depending on how long it is for....how do you experienced investors manage this? Are your PPOR's IO? Anyone with experience past the 10yr IO max (or 15 if I call it an investment loan for the bank)...Do you take the full IO time offered? Can it be rolled into another IO loan? Same qn. for investments I guess, do they get rolled into IO again? I imagine it isn't as much of an issue as rents will have caught up to some degree with the increased repayments required in 15yrs time, but PPOR is a bit different and depends on wages at the time, etc.