Maximum period for interest only

Hi, my broker just advised me that the usual Interest only period with most lenders is five years after which the loan could be either refinanced or converted into PI... Is this a valid statement?

On 30 year loan the first five years on PI loan will comprise mainly of onterest repayments in case of annuity formula...
 
Hi, my broker just advised me that the usual Interest only period with most lenders is five years after which the loan could be either refinanced or converted into PI... Is this a valid statement?

On 30 year loan the first five years on PI loan will comprise mainly of onterest repayments in case of annuity formula...
If the loan is over80 to 90 % then thats generally true.

If the loan is at 80 % or less, quote a few lenders will do 10 years straight up, and at least one will do 15.

There is some variabaility on fixed term loans, where for ega 3 year fixed can only be comboed with a 3 year IO term.

If you are after a longer term IO period, a proper evergreen LOC that some lenders use will have an IO period for the full loan term. Note though, that these products have their own issues in terms of RISK which can be different to a normal SVR loan.

ta
rolf
 
Hi, my broker just advised me that the usual Interest only period with most lenders is five years after which the loan could be either refinanced or converted into PI... Is this a valid statement?

On 30 year loan the first five years on PI loan will comprise mainly of onterest repayments in case of annuity formula...
Ive loan got a plain ordinary IO st george portfolio loan, Ive had for 10 years, it expires in 2050. So you must be able to get IO loans up to 47 years. It started as a construction loan then was convert to an LOC.
 
Ive loan got a plain ordinary IO st george portfolio loan, Ive had for 10 years, it expires in 2050. So you must be able to get IO loans up to 47 years. It started as a construction loan then was convert to an LOC.
I can't see how you'd be able to get any loan with a term of 47 years in todays regulartory environment. It might have been possible 10 years ago, but almost certainly not today.
 
Thanks, Guys! Exactly what I needed.

As I understood, five is a standard but could be negotiated. As always, do not ask- do not get:)
 
Thanks, Guys! Exactly what I needed.

As I understood, five is a standard but could be negotiated. As always, do not ask- do not get:)
Or you can refinance to another bank at the end of 5 years and go IO again.

Regards Jason.
 
All my IO loans that have been with Westpac have been extended without me having to do anything.

ANZ's will not and I also know of a friend who has had their loan repayment change to P&I. The only way ANZ will remain at IO is another full application!

You'd be surprised how long is 5 years in the scheme of things. Circumstances change, and the effort may be lost anyway, as you may refi or sell within that time, making the longer IO term redundant.
 
ANZ's will not and I also know of a friend who has had their loan repayment change to P&I. The only way ANZ will remain at IO is another full application!
.
and there is a process now where you can do a conversion back to IO with a full app.

My experience on this it works sometimes when the stars and the moon line up, and the person thats dealing with it has a reasonable knowledge of the process and its high tide.

even with all the ducks lined up and the lvrs below 80 %, the anz mess is unreliable at best

ta

rolf
 
CBA can do a maximum of 15 years, but from above 5 years you need approval from above :)

Also no questions asked on going back into IO.
 
Yeah CBA converting back to IO can usually be done by mortgage services ie not a credit decision just a signed form required. So with them let it roll over to P & I then send in the switch form.
 
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