"IO LOANS,MAXIMUM OF 5 YEARS?"

W

WebBoard

Guest
From: Anonymous


Recently enquiring about purchasing an investment property with the bank on an interest only bases i was told that they only do interest only for a maximum of 5 years then after 5 years the loan converts to principle & interest.

Does anyone have any suggestions,is this normal who do you guys all finance with? i was hoping to finance IO for the life of the loan not 5 years?
 
Last edited by a moderator:
W

WebBoard

Guest
Reply: 1
From: Peter Troiano


you should be able to get an interest only loan with an evergreen comp that never expires.
 
Last edited by a moderator:
Reply: 1.1
From: Lotana Von Amor


As far as I know, if you don't default on interest repayments, the banks are almost always more than happy to roll over your loan to a new interest only period.

Lotana
 
Last edited by a moderator:
W

WebBoard

Guest
Reply: 1.1.1
From: Russell Chellew


Hi ,

2 suggestions

ANZ now offer 10 year I/O loans then converts to P&I.

or

Apply for Equity/line of Credit which can be I/O until further notice ie no set term.

Speak to an independent mortgage broker who will be able to come up with a few alternatives to your existing lender.

Good luck

cheers

Russell
Russell.chellew@mortgagechoice.com.au
 
Last edited by a moderator:
Reply: 1.1.2
From: Rolf Latham


Hi Lotana

One has to be careful with that soemtimes, as does one with using a Line of Credit.

Westpac as an example pulls its 5 year I/O loan in after 5 years and asks you to reapply effectively. Most RLOC have review dates which are annual to 3 yearly. In either case you can be left sitting without finance because your circumstances or the rate market around you has shifted.

I agree though that if all is rosy most lenders will not let you walk and will renegotiate.

Ta

Rolf
 
Last edited by a moderator:
Reply: 1.1.2.1
From: Kellie Dutton


Lotana

I'm with Rolf, most lenders will be happy to re-negotiate your loan at the end of the IO period. FYI most lenders are only doing 5 year IO then revert to P&I, that's just standard. If you are considering further investments in reality you won't have the loan for 5 years, will have it re-fi'd prior to pull out some equity.

Kellie
kdutton@smartline.com.au
 
Last edited by a moderator:
Top