Io --> P&i --> Io

[Piston Broke]

I got a letter from the bank stating one of my loans that was Interest only has expired, and will soon go to P&I.
So i phoned them:
PB> I have an IO loan that has expired and is reverting to P&I, I'd like it to be IO again.
Bank> Sure, lemme get your details up... That's not a problem, we'll convert it back to IO for 3 yrs at variable @ 5.5%. We can also give you an offset acct. Do you have a saving type acct?
PB> Yes, there's ~4k in there as i have'nt changed the payments since rates went down. Can you make that an offset acct?
Bank> Yes we can.
PB> So there's no problem going back to IO?
Bank> Nope
PB> I keep hearing ppl say that they are only being offered P&I? Is this true?
Bank> That would depend on their situation.
PB> Is it because they have a very high LVR
Bank>I'd say that may be the case, but it does'nt apply for you.
PB> What are the fees for changing it back to IO?
Bank> None.
PB> Changing the acct to offset?
Bank> None
PB>Really none? I've never heard that before from a bank lol
Bank>lol well not this time. We'll just check your income & balance sheet and change it for you. I'll just ask you a few questions.

That was it, done with a phone call.
I guess that it's only a problem for those with high LVRs and that banks are just trying to cover themselves in case things turn for the worst and they'll be forced to take a loss on the loan. Not sure what target LVR they may have, but I'd assume it's the same as whatever loan LVRs they are currently offering.

 

[jaycee]

Tell me it was which bank please

 

[Propertunity]

Good one PB.

I had a similar call with Macquarie Bank week before last. IO for another 5 years - no problems Sir!

 

[Piston Broke]

jaycee it was with NAB.
I very reluctantly went with them 3 yrs ago as I had a bad experience in the early 90's (even worse with CBA).
But I have no complaints this time round and their rates are good.
The reason it did'nt apply for me is that my LVR is 53% based on their valuation
from 3 yrs ago. And it's since been through a rezoning allowing multiple dwellings to be built on it.
I'm not all that grumpy all the time you see...

for the record this convo was a few wks ago, only posted after i got the confirmation letter.

 

[Bill-M]

This process varies significantly from bank to bank.

Some banks will switch you from p&i to i.o no questions asked.

I remember, when I was working for Suncorp, they required a full application form to be completed so they can assess your up to date statement of a&l's prior to making their decision. It was almost impossible to have i.o approved for regulated loans.

 

[Rolf Latham]

ANZ is a classic case

Body parts, DNA and full financials and valuations

From a brokers pint of view, to top it off, no new comm for the same work as a new loan, and a redn of 40 % in the trail comm you were getting previously.

And ANZ wonder why people run !

ta
rolf

 

[Bill.M.]

ANZ is a classic case

Body parts, DNA and full financials and valuations

From a brokers pint of view, to top it off, no new comm for the same work as a new loan, and a redn of 40 % in the trail comm you were getting previously.

And ANZ wonder why people run !

ta
rolf

wow, didn't think it would be such an issue with a major. All it takes with WBC (& CBA I think) is a phone call to the call centre.

 

[craigb]

depends on the bankers? once apon a time in band camp.
two years ago! i called up for a 20 loan and they said that they will place it into the account now and somtime thiss wk come in and fill in the paper work
Threw me for a six,

 

[StuartW]

I second that Rolf. ANZ are an absolute nightmare. We have been trying to do an "easy increase" (yeah right!) for a client for 2 months. Its only $15k!!! Business wise, it would have probably been more cost effective for me to give the client $15k!

 

[Piston Broke]

I use ANZ for most of my biz stuff and they been ok.
Never had problems. Over the years I asked for 10-20k extension
on overdraft a few times and got it instantly.
I also had a pre-approval for 250k looking to buy a biz, very easy done, but the deal fell through.
Always been straight up with them, never had problems.
I've had the same accts for 15 yrs, and i make sure I remind them.
On the biz side, they seem good and open to negotiation.
On the home loans side, tried once and they did'nt seem that bright and did'nt return calls, so I just deal with the biz ppl.

 

[Rolf Latham]

Business/Commercial and Residential are very dis similar with almost all lenders

ta
rolf

 

[xcesiv]

The CBA Swapped Mie from a P&I to IO after 12 months on P&I.

they wanted me to grow a bit of equity into the IP before going IO.

Now both on IO and both ending there IO and Fixed Rates at end of year. So cant wait. If rates stay low as they are i will be Cash+ and will breeze into my 3rd early Next year.

 

[sparky23]

Once I finally received the form from St George it was no prob to change to interest only, this is for 12 years as there is a 15 year max and we already used up 3 years. Bearing in mind though it has taken since November to finally get there with this months payment!

 

[Piston Broke]

Rolf as far as I know the ANZ biz people are mainly employees.
The home loan people seem to act like MBs or contractors as they
don't seem to care much about what happens, customer service and wer'nt
all that savvy in regards to RE.
I do remember a plan a few years ago where banks all had plans to want to increase
their home loan biz coming thru MBs considerably around 02/03.