IO Loans

[navjit6]

my brother bought his PPOR in July, P+I loan. he bought it using the FHOG, after he lives in it for at least 6months (maybe bit more), and then moves out and keeps as a IP, is it beneficial to refinance/change the loan to just IO, so that he can save more money to begin saving for another IP. he has an offset account.

if i was to buy a PPOR using FHOG, and live in for the required 6months, and then use it as IP, do the banks allow you to take out IO loans for PPOR? are there any special requirements?

 

[LoanFinder]

Depends on the lender, but most will allow IO on PPOR.

 

[Rixter]

IMHO there is no financial advantage in paying P&I on an investment property in the acquisition phase of your portfolio. Like you mention you are far better off using it towards the holding costs of further property.

 

[navjit6]

Thanks Loan Finder & Rixter...appreciate it

 

[Rolf Latham]

2 obvious exclusions

Heritage ni IO on PPOR

and

Stg

No proper IO offset on PPOR

ta
rolf

 

[navjit6]

i didnt understand that, can you please explain it.

2 obvious exclusions

Heritage ni IO on PPOR

and

Stg

No proper IO offset on PPOR

ta
rolf

 

[Rolf Latham]

Sorry

Heritage doesnt do IO on Owner Occ

St George Does do IO on Owner OCC, but savings from the benefits of the offset acct flow through to reduce the principal. Not what u want, what u want is for the principalto remain the same, but for the interest repayments to be reduced


ta
rolf

 

[navjit6]

can the principal remain the same if:
IO loan: 300k
Offset: 50k
does that mean you pay Interest on only 250k, but principal remains 300k?

Sorry

Heritage doesnt do IO on Owner Occ

St George Does do IO on Owner OCC, but savings from the benefits of the offset acct flow through to reduce the principal. Not what u want, what u want is for the principalto remain the same, but for the interest repayments to be reduced


ta
rolf

 

[Rolf Latham]

Not with the St George Product on PPOR, but with most others, yes, you got it !

ta
rolf